Fiscal year ends with no budget

The CNMI government enters a new fiscal year tomorrow without a budget to keep its spending in line with the diminished resources.

Both the Senate and House of Representatives have agreed with the administration’s revenue projection, amounting to $156.7 million, for fiscal year 2009. However, legislation that details how this money should be spent is far from being approved.

Because no budget has been passed, the government will automatically go on “continuing resolution.” This means it will continue to go by the last enacted budget, which appropriated $163 million in government funds.

The House Ways and Means Committee is still in the process of drafting the appropriation bill. Rep. Victor Hocog, chairman of the committee, said the bill is expected to be introduced on the House floor on Wednesday.

According to Hocog, the committee is looking at a bill that appropriates $117 million for payroll and $39 million for all other operational costs.

Under the spending plan being considered by the committee, the Public School System will receive a budget of $38 million, Northern Marianas College $6.2 million, the Legislature $6.5 million, and the Judiciary $4.1 million. Gov. Benigno R. Fitial will be free to determine how the rest of the funds will be distributed to the departments within the Executive Branch, as well as the independent programs.

Government contributions to the NMI Retirement Fund will remain at 11 percent of the payroll for active employees. An additional 1 percent will be paid to provide for retiring employees who have been affected by the pension agency’s decision to freeze all new retirement applications, Hocog said.

The Rota lawmaker also said the budget will contain no austerity provisions that have direct impact on the employees’ income. There will be no comeback for the so-called “austerity Fridays” and “unpaid holidays,” he said.

“I am confident that not too long from today, we’ll see some additional resources,” Hocog said, citing the potential recovery of more “cover over” taxes from the federal government. The U.S. Department of Treasury has already paid over $30 million of the federal taxes, which the U.S. government had previously failed to transfer—or “cover over”—to the local government.

Hocog said the U.S. Treasury is expected to make another disbursement of $6 million to $10 million in December 2008.