Fitial to veto budget

Gov. Benigno R. Fitial said yesterday he would veto the Legislature’s second attempt at a fiscal year 2009 budget, citing a lack of austerity measures in the bill.

In December, when Fitial vetoed the Legislature’s first budget plan of $165.4 million—citing an $8 million drop in projected local revenue—he urged the Legislature to include austerity measures in any future budget measure. After the veto, he then slashed government budgets across the board by 5.5 percent for the rest of the fiscal year to reach $156 million, which would allow the government to finish the year in the black.

The House Ways and Means Committee used the proportionate reduction as a model for the revised budget of $156.76 million, which included $148 million in local revenue collections.

But without austerity measures, Fitial said he will not approve the budget.

“We provided for austerity measures,” he said yesterday during a news briefing. “We know the resources will continue to decline, so that’s why we proposed those austerity measures to be part of the budget.”

During the first quarter of fiscal year 2009, when the 5.5 percent budget cut was not in place, the government overspent by several million dollars, Finance Secretary Eloy Inos said. The expenditure rate was approximately $45 million for the first quarter, which, if left unchanged, would have reached $180 million by the end of the year.

“We need to bring that down,” Inos said. “So we’re saying, ‘Let’s do austerity measures so we can bring that down, such at the end of the year when you add all that, it’s $148 million.’”

Asked if the administration would approve the budget if austerity legislation were later passed, Inos said, “We’ll consider that. Until we see the content of that law it’s very difficult to make any assumption at this point. We’ll need to see.”

One measure that has been discussed is reducing the government pay period to 64 hours, but that needs legislative approval, Inos said. Fitial has the authority to reduce the hours of contract workers, but not civil service employees.

“That needs legislation,” Inos said. “That’s what we mean by cost-cutting measures.”

Fitial will advise the Legislature on what needs to be changed when he notifies the members of his decision to veto, Inos said. The governor must officially transmit his decision to the Legislature by Tuesday.

“Certainly, when the governor vetoes the bill he’s going to make some recommendations, whether that be in the form of general policy issues or in the form of a draft legislation—it could go either way,” he said.

It’s the governor’s prerogative to veto the budget, said Rep. Ray Yumul, chairman of the House Ways and Means Committee, adding that once he gets the official notification he will meet with other members to decide what the next step should be. The Legislature could override the veto and pass legislation to meet the requests of the governor, he said. The House earlier failed to override the governor’s veto of the first budget.

At this point, Yumul said, fiscal year 2010 budget deadlines are approaching and it may be better to focus on that. Individual government departments have already been submitting their 2010 budget requests. On April 1, the governor must submit his budget proposal for fiscal year 2010, which will begin Oct. 1.

“Basically, look at 2009 as an opportunity that came and went,” Yumul said.