TORRES SIGNS BUDGET BILL IN 11TH HOUR
Partial govt shutdown avoided
Commending the Senate for its swift action, while expressing utter disappointment in the House of Representatives majority leadership for failure to expeditiously pass a budget bill, Gov. Ralph DLG Torres on Saturday morning signed into law the $109.7-million budget bill for the CNMI government’s operations for Fiscal Year 2023, averting a partial shutdown of government operations.
“See you at work Monday,” said Torres after he signed the budget legislation, House Bill 22-116, HD2, SS1, Conference Committee Substitute 1, into Public Law 22-22.
He received cheers and claps from some members of the Legislature, Cabinet, and other government employees, who were present in the Office of the Governor’s conference room.
Torres said on behalf of the people of the CNMI, it is his great pleasure despite his disappointment with the House majority for passing this budget bill late, to have this legislation signed into law.
“To all our government employees, I thank you for all the hard work and dedication. I apologize for any inconvenience and any worry that whether or not they go back to work Monday,” the governor said.
Among those present at the signing of the budget law were first lady Diann T. Torres, Senate President Jude U. Hofschneider (R-Tinian) who appeared virtually, Senate Fiscal Affairs Committee chair Sen. Victor B. Hocog (R-Rota), Sen. Vinnie F. Sablan (R-Saipan), House minority leader Rep. Angel A. Demapan (R-Saipan), and Finance Secretary David DLG Atalig.
Combining the $109,782,265 million from the general fund and the $32,624,344 allocated to the CNMI from the American Rescue Plan Act, the CNMI government will have at its disposal a total of $142,406,609 million for government operations in the new fiscal year.
The gross identified budgetary resources for Fiscal Year 2023 totaled $150,415,492 million. Minus debt servicing costs in the amount of $46,041,123, this leaves the government $104,374,369 million that’s available for appropriation.
Adding to that the $5,407,896 million budget for the Department of Public Lands, the grand total revenue available for appropriation is $109,782,265.
Torres vetoed in its entirety several sections in the bill that he found to be unclear, ambiguous, or problematic either in their inconsistencies with existing provisions of Commonwealth or federal law or in their implementation’s imposition of additional and unnecessary steps that would delay governmental efficiency.
Before signing the bill into law, Torres mentioned that in reviewing the legislation he was assisted by deputy attorney general Lillian A. Tenorio, Finance Secretary Atalig, and the Office of Management and Budget staff.
“Today is a very important day. And as you know, I am mandated by the constitution to give the budget to the Legislature by April 1 and I have done that,” he said.
The governor said the House passed their version of the budget on Aug. 27 and transmitted it to the Senate on Aug. 29.
He said the Senate acted on it swiftly and expeditiously and passed it on Sept. 23.
Torres said the House rejected the Senate version with the exception of five House minority members who voted in support of the Senate version.
He said the Senate and the House had a conference committee on Thursday and came up with a joint budget.
The Senate and the House unanimously approved the conference committee’s final product and thereby passed the budget legislation Friday afternoon.
Torres said they had the OMB, Secretary of Finance, his legal
counsel, and staff, addressed thoroughly the bill.
“And we worked all the way past midnight,” he said. Asked why Lt. Gov. Arnold I. Palacios and House Speaker Edmund S. Villagomez (Ind-Saipan) did not attend the signing of the budget bill, Torres said he didn’t invite either one of them as there is no reason to invite someone that doesn’t believe in the Leadership.
Senate President Hofschneider thanked Torres and his team for acting swiftly on the disposition of the budget legislation, which he said is their primary responsibility as elected officials in the CNMI.
“No one in the Senate is thinking of a shutdown,” said Hofschneider, adding that with that mindset and the collaborative effort with the leadership of the Senate led by Fiscal Affairs Committee chair Sen. Hocog, they went to a conference committee meeting with the House and got the final product.
The president said he is thankful to Finance Secretary Atalig, who was able to articulate some of the questions that the bicameral conference committee asked primarily from the House with regard to the funding for Medicaid and retirees.
Senate Floor Leader Sablan said it’s a very exciting day and a comforting day for the people of the CNMI.
Sablan, who served as the Senate conference committee’s vice chair, said one of the House’s approach to the budget bill was to use 80% of ARPA funds to fund the personnel of the CNMI in FY 2023.
“We saw that was not a wise move,” Sablan pointed out.
He said the governor, as the executive of the state, had to submit an ARPA spending plan to the U. S. Department of Treasury.
Sablan said that plan was approved and it was then the ARPA monies were given to the CNMI and expended to satisfy the portions that were placed in the spending plan like ensuring that the CNMI invest money into broadband, healthcare, infrastructure, and a lot of other portions of the spending plan that was placed as a requirement.
“So we saw that if we were to take the House version and remove 80% and put it into paying the personnel of our government, it would have really affected the spending plan.
And the unknown was could we really do that? How would we go back and report to the U.S. Department of Treasury that the plan was changed?” Sablan said.
He said they made it clear during the conference committee’s meeting and that it was not a topic of negotiation for the Senate.
“We wanted to make sure that the ARPA stays as it is, which is working as the governor has been spending this money and not only spending the money, investing it,” Sablan said.
He said the CNMI has until Dec. 31, 2024 to extend all the ARPA monies to the departments.
Sablan said with respect to outside sources such as the Compact Impact funds that came in, the House wanted to appropriate those funds.
He said they made it clear that those funds can only be expended by a formula that is provided to the state.
He said the House agreed to take the Senate’s version and that’s what is in the product today.
Sablan said they compromised with the House on some parts of the budget bill to come up with a balanced budget.
“We’re very happy that we were able to prevent a government shutdown. We all walked into the conference committee two days ago with one goal and that one goal was to ensure that the minute we walk out that door is to prevent a government shutdown and to provide comfort to our people,” he said.
Sen. Hocog said the meat of the conference committee’s disagreements or differences is the 20%-80% use of ARPA-local funding for personnel to return back to 80%-20%.
Hocog said they placed two counsels from the House and the Senate to tell the conference committee whether or not the action of the House to appropriate ARPA funds is legal as their
counsel of the Senate is telling them otherwise.
He said during the counsels’ exchange, they (Senate) took a letter from Attorney General Edward Manibusan advising or responding to House Ways and Means Committee chair Rep. Donald M. Manglona’s (Ind-Rota) inquiryof whether or not the Legislature can appropriate ARPA.
Hocog said it is very indicative in the AG’s letter that the Legislature has a limit to appropriate and that limit extended that the legislature cannot appropriate ARPA funding.
“They (House) adamantly refrained from answering yes or no at the first time that I told them that in order for us to move forward we need to dispose of the heart of this appropriation from the Senate version. Anything then after that followed our discussions and a compromise was received,” he said.
Hocog said they then tackled three major disagreements.
When Hocog disclosed that the Senate version restored all full time employees deleted from the House version, this drew claps and cheers from many people in the conference room.
He said the ARPA fund that was deleted by the House totals 2,103 FTEs and that the Senate reinstated that.
Hocog said on the local funding, the House version deleted 100 plus FTEs, and that the Senate restored that back.
“Everything is restored by the Senate of what was deleted from the House,” he said.
Speaker Villagomez, in an interview shortly after the House passed the budget bill Friday afternoon, said the process can be painstaking and it can be long.
“I wish we could have passed the budget sooner but again, things happened. And we worked through the challenges,” said Villagomez as he extended his appreciation to the conference committee conferees from both the House and the Senate side.
“It was a very amicable, diplomatic meeting. They got the big compromise out of the way and they were able to get something a product out by the 11th hour, enough for the House and the Senate to get it out,” he said.
Rep. Donald M. Manglona stated shortly before they voted to pass the budget bill Friday that what is included in the committee report is the letter from Finance Secretary Atalig, identifying the Community Disaster Loan as a funding source to address the Medicaid and retirees.
“The 80%-20% was never really the issue. It’s not who gets 80% or what, whether it be through ARPA or general fund,” Manglona said.
He said the goal of the House Ways and Means Committee was to address the 25% benefits for the retirees and the Medicaid local matching fund.
Manglona said without knowing what additional resources were available, it was a challenge of the committee to find those funds and in doing so, they identified the $20 million from the Medicaid reimbursement.
He said, however, after hearing from Finance Secretary Atalig during his statement Thursday during the conference committee’s meeting, those funds weren’t available until the secretary had identified the $20 million from the CDL.
Manglona said the committee previously mentioned that based on the fund status report that they received from the Finance secretary, only $36,000 was available.
“However if you look at the report, there was $20 million that was spent for COVID response. Because those were approved for reimbursement through the money that we’ll be getting from FEMA (Federal Emergency Management Agency), we will then be given back from CDL and then those funds will be reserved and set aside for the Medicaid, retires, as well as to help provide additional funding to the judiciary and the Legislative Branch,” he said.
Manglona said all of this delay could have been avoided had they (committee) given proper reports or have the Finance secretary communicated all these additional resources that they’re to receive.
“We could have addressed all these issues early on,” he added.