Wage cut bills shelved

The Legislature has decided to put aside the wage cut proposal and is now looking at the NMI Retirement Fund for solutions to the government’s financial problems.

Sen. Felix Mendiola, chairman of the Senate Fiscal Affairs Committee, said yesterday that the House Ways and Means Committee and his panel had agreed to shelve the wage cut bills pending in both houses of the Legislature.

Widespread opposition to the plan prompted the decision, he said.

Mendiola also reported that the Senate was now mulling the feasibility of three draft legislations concerning the Retirement Fund.

Specifically, the Senate is studying a draft bill that would write off as uncollectible the $123.7-million debt to the Retirement Fund that the government has accrued since 1995.

To improve the Fund’s fiscal solvency, the Senate may also push for legislation allowing the Fund to float one or more bonds amounting to a total of $40 million. The bond flotation may be done through the Commonwealth Development Authority.

At the same time, a sinking fund may be established to guarantee repayment of the bond.

Furthermore, the Senate is considering the introduction of a bill reforming the public employee benefit program.

Mendiola noted that 22 amendments had been made to the NMI Retirement Fund Act since its inception. Most of these amendments increased member benefits, resulting in a lack of proportion between the benefits’ cost and the government’s financial ability.

“We can no longer afford to be so generous,” Mendiola said.

According to Mendiola, the proposed actions form part of the Legislature’s efforts to exhaust all possible solutions to the government’s financial crisis before it will act on the wage reduction plan.

“It’s the will of the people,” he said of the Legislature’s decision to put the wage cut bills on hold. “A wage reduction will be a last resort. We are now looking at viable options without hurting the pockets of our constituents.”

In his State of the Commonwealth Address last Friday, Gov. Benigno R. Fitial said he needed to implement the wage cuts to reduce the government’s $37.5-million shortfall for this year.

“The wage reduction legislation pending in the Legislature is intended to be a temporary measure to help the Commonwealth survive this current crisis,” Fitial said.

The bills sought to reduce government wages by 10 percent across the board.