House pushes forward with $32M from casino BGRT

Millions to govt debt to CUC
Posted on Aug 19 2016

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House of Representatives fiscal chair Rep. Antonio Sablan (Ind-Saipan) has readied a bill appropriating $32 million from Saipan casino gross revenue tax funds for priority agencies and government obligations.

The proposed appropriations, in House Bill 19-194, come in line with Gov. Ralph DLG Torres’ earlier recommended list of priorities but are scaled back in their amount. Sablan’s House and Ways Committee decided to base appropriations on actual figures and not Torres’ full projected figure of $47 million this fiscal year.

Sablan says any additional monies not appropriated can be used in FY 2017.

The Ways and Means committee appropriated $32 million rather than the full amount after looking at numbers provided by the secretary of the Department of Finance and the Commonwealth Casino Commission, showing what has actually been paid to Finance so far, Sablan said.

They also took into account the average monthly BGRT tax paid out at around $2.2 million or $2.5 million, he said.

“We decided to conservatively just add $2 million more to what’s already been paid in as of July,” the lawmaker told Saipan Tribune.

“That’s conservatively appropriating that amount,” he continued. “There might be more. The August amounts might be more than the $2 million and we also have September collections but we decided that we would rather work with actual figures so the money becomes immediately available upon signing by the governor.”

Bottom line, they are working with $15 million less than what was estimated in the governor’s earlier message.

Sablan said his bill should be ready for a session eyed next week Tuesday, where they also intend to pass a FY 2017 budget bill. The Ways and Means Committee recommended passage of the bill in a Aug. 15 committee report.

Millions to govt debt to CUC

H.B. 19-194 appropriates $2.5 million for Fuel Adjustment Clause (FAC) Rate Subsidy; $16 million for the Commonwealth Healthcare Corp. to pay its outstanding balance to the Commonwealth Utilities Corp.; $1.6 million for the Medical Referral Program’s outstanding obligations to Guam Memorial Hospital; $9 million for the payment of land compensation judgments; and $2.9 million to the Public School System for utility debt to CUC, $100,000 of which shall be used to pay of outstanding balances owed to school meal vendors and another $100,000 to pay school’s maintenance and repairs.

According to Sablan, the PSS monies essentially free up $1.2 million in their current FY 2017 budget submission originally intended to also pay for outstanding utilities for next fiscal year in the amount of $100,000 per month for twelve months.

This means the $2.9 million from the casino BRGT will free up the $1.2 for PSS’ other budget needs.

The $16 million from the casino BGRT from the hospital and the $2.9 to PSS, Sablan said, will help CUC help immediately.

“That’s cash on hand. That’s money that finance should be ready to remit to CUC right away. It’s not projections,” he said. “Once the governor signs it and the billings between CHC and CUC are agreed upon, Finance can immediately pay for those and then the land compensation” and government obligations.

These include various judgments and settlements, from medical malpractice to contractual judgments, among others.

Sablan’s bill spells out how these will be paid according to priority.

Judgments between $1,000 and $50,000 regardless of date will be paid in full, per his bill.

Judgments over $50,000 will be paid on a proportional basis.

Sablan explained this as proportional to “to what’s owed and what’s appropriated.”

He also underscored how an economic turnaround was able to help them “do all of this.”

“We have to bear in the mind that from FY 2015 to FY 2016, we basically had a supplemental budget increase of roughly $10 million. But that $10 million really just went to increases in Group Health and Life insurance and the Settlement Agreement. But from FY 2016 to current, the increase in general fund went up roughly $24 million—and on top of that the casino BGRT at the least for FY 2016, is at $34 million. So that’s roughly $50 million additional from FY 2016,” he said.

“That’s very substantial, which is why we have got to ensure the current economic policies continue,” he added. “And that’s why in [the FY 2017] budget, we try to allocate monies to those agencies like Zoning Board to make sure that while we welcome the added economic activity, we make sure that the development is planned. We don’t want to keep building without any consideration to the environment and other considerations out there. We still welcome the development but it’s got to be a controlled, planned development. That’s why we look to those agencies to try to help them. We try to give them more resources to do the job.”

If the economic progress continues, Sablan believes they should look to continue improvements to the hospital and long-term improvements to the campus of the Northern Marianas College, as well looking at possible legislation for a new museum to showcase the culture of the NMI.

Dennis B. Chan | Reporter
Dennis Chan covers education, environment, utilities, and air and seaport issues in the CNMI. He graduated with a degree in English Literature from the University of Guam. Contact him at

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