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Yumul says $10M deficit so far in first quarter of FY ’09
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Posted on Jan 12 2009
The CNMI government is estimated to be $10 million in deficit after the first quarter of fiscal year 2009, according to numbers obtained by Rep. Ray Yumul.
Yumul, chairman of the House Ways and Means Committee, said he contacted a “well placed” source in the Executive Branch who informed him the government spent $47 million from October to December, the first three months of the 2009 fiscal year.
At this rate, he said, the government will be spending approximately $188 million for the fiscal year—more than the projected $156.7 million that Gov. Benigno Fitial said the government expects to collect this fiscal year.
Fitial submitted the revised number after vetoing the Legislature-approved budget of $165.4, citing an $8 million drop in projected revenue.
Yumul said the $10 million deficit is why Fitial, following the advice of Finance Secretary Eloy Inos, recently enacted an across-the-board budget cut for government agencies.
“That’s why the Secretary had to make the drastic decision to reduce 5.5 percent,” Yumul said.
He added that there was no reduction to budgets in October, but there was a reduction of 1.7 percent in November, a reduction of approximately 2.1 percent in December and a 5.5 percent reduction starting in January.
“There will be another drastic reduction if we stay the course,” he said, adding that the reduction would be seen in layoffs and reduction of government hours.
When questioned by the House yesterday, Inos said he expects to see the official numbers for the first quarter later on in the day and would submit it to the Legislature today.
Press secretary Charles Reyes said the governor is calling on the Legislature to pass three or four measures to alleviate the deficit. Those measures include enacting austerity holidays, not working on Fridays, and reducing Retirement Fund contributions from 18 to 11 percent. Also, the governor is seeking reprogramming authority and expenditure authority.
“So we agree that we are on deficit spending,” Reyes said, adding that the administration needs the Legislature’s help to enact the measures.
Even if a new budget is not passed, Reyes said, the budget cuts are still necessary.
