$98.89M net resources for appropriation
Gov. Ralph DLG Torres’ proposed budget for next fiscal year identifies a gross budget of $144.84 million, with only over $98 million left for appropriation after deducting debt service payments and NMI Settlement Fund obligations.
In his proposed budget for fiscal year 2022 that Torres submitted to the Legislature last Thursday, he said the gross operating resource for the year is estimated at $144,848,801, but minus $45,951,500 for debt service payments for the 2007 series bonds and annual obligations to the NMI Settlement Fund, this brings the net resources available for general appropriation to just $98,897,301.
Still, this $98.9 million is an increase of 2.5% compared to the net resources available in the fiscal year 2021 budget, Public Law 21-35, due largely to the reduction in pension payments, according to the Department of Finance.
Torres also submitted to the Legislature a separate “Volume IV” that is created specifically for the provision of government services in fiscal year 2022.
Torres said it is unknown to what extent the economic impacts of the pandemic will be unless the CNMI begins with bold steps that focus a commitment to safely reopen schools, ease restrictions on commercial and recreational activities, and welcoming back visitors to the islands.
“The arrival of the [COVID-19] vaccine is a giant step to protect our community by encouraging them to be inoculated for the safety of their families and our community as a whole,” the governor said in his letter to Senate President Jude U. Hofschneider (R-Tinian) and House Speaker Edmund S. Villagomez (Ind-Saipan).
He said the budgetary gross adjustment reflects the inclusion of the allocation to the Settlement amounting to $39 million or 27%.
Torres said their approach in the development of this budget is to satisfy the mandates of House Legislative Initiative 18-12 and continue to maintain funding in every department and agencies sufficient to continue the efficiency in government operations.
However, he said, budget formulation continues to be very challenging with the continued loss of revenues resulting from the extension of the public health emergency and zero tourism to aid the economic recovery.
With the significant reduction in resources, Torres said they examined two years of past and current expenditure activities to determine allocation.
However, he said, available funding is only sufficient to cover 64 hours per pay period. The enactment of the American Rescue Plan Act of 2021 will provide additional relief to address the continued impact of the COVID-19 pandemic on the economy, public health, state and local governments, individuals, and businesses, he said.
He said the CNMI is privileged with a substantial allocation in Coronavirus State and Local Fiscal Recovery Funds to help the Commonwealth with the impacts of the pandemic, making funds available for the provision of government services. This funding, Torres said, will aid the CNMI in restoring the hours of those affected by austerity due to loss of government revenues, including reinstatement of employees that were furloughed and the cancellation of the reduction-in-force.
He said Finance Secretary David DLG Atalig is now compiling the Commonwealth’s proposed spending plan for submission to the U.S. Secretary of the Treasury for review and approval prior to remitting federal funds to the CNMI.
With the availability of the ARPA funding, Torres said he encourages the Marianas Visitors Authority to move forward with planning for the resumption of activities aside from the promotion and marketing of the Marianas as a tourist destination, but to also include or create outdoor events for the community, which has been affected by this pandemic for over a year now.
“Such outdoor activities that our community can look forward to include the Taste of the Marianas, a bike-run promotion for our growing biker’s community including events for the younger generation and boaters, etc.,” he said.
The governor said the government can help improve the quality of life for the community by reintroducing events they enjoy and thus will capture the resources they eagerly want to spend when travel reopens.
Torres said the government’s first step is to mitigate the impact of those resources from exiting the Commonwealth by starting with community promotions, then venture out to entice visitors to come back.
To maintain a balanced budget, critical activities and programs are considered with minimal allocation, Torres said.
He said 20% of government wages will be covered under the ARPA allocation to the CNMI, contingent on the U.S. Secretary of Treasury approving the CNMI’s proposed spending plan.
Torres said the availability of this funding to the CNMI within the 60 days of enactment of ARPA will allow those affected by the reduction in government hours, the cancellation of the reduction-in-force, and the reinstatement of furloughs to return back to their duty station.
With respect to the Public School System, Torres said his proposed budget satisfies the mandates of House Legislative Initiative 18-12 by allocating 25% of the net budgetary resources available for appropriation, amounting to $24,724,325.
He said Section 2005 of the ARPA appropriates $850 million to be allocated to the outlying areas, of which the CNMI is grouped with American Samoa, Guam, and Palau.
He said PSS is entitled to receive a substantial allocation from this section of the ARPA, with the money remaining available until Sept. 30, 2023.
As for the Northern Marianas College, Torres said his proposal allocates $5,092,668 to NMC, of which $3,082,668 is from general fund, $1,260,000 will be derived from Northern Marianas Workforce Act of 2018 for vocational and apprenticeship programs at the college, and $750,000 from Compact Impact funds.
He said additional allocation is reflected in Volume IV (ARPA) for the provision of higher education services of NMC to reinstate reduction in hours and those affected by furloughs. Torres said funding from ARPA to NMC will restore services that were suspended as a result of the loss of government revenue.
On group health and life insurance, $6.5 million is allocated in employer contributions for active retirees in the government’s group health and life insurance provider.
Torres said employer contributions for active employees enrolled in the government’s group health provider program is allocated in Volume IV (ARPA).
As to the Commonwealth Healthcare Corp., Torres said $302,659 will be allocated to CHCC to fund the services provided to incarcerated individuals requiring medical care not available at the prison clinic.
He said Volume IV (ARPA) includes funding to meet the required non-federal cost share enabling the CNMI to maximize its Medicaid allocation in excess of $70 million. Torres said additional funding to CHCC is included in Volume IV (ARPA).
In addition, the ARPA appropriates over $86.4 billion that makes funds available to programs that CHCC will benefit directly. He said the funds are available in the form of grants that CHCC may qualify for through the grant application process.
Torres asked the Legislature to reassess local laws governing foreign labor relating to the importation of construction workers and suspend provisions to ease bringing in these workers for disaster recovery work. He asked the Legislature to institute a sunset provision for a three-year period to align with the additional 3,000 construction workers granted to the CNMI for the purpose of recovery following the devastation typhoons Mangkhut and Yutu, pursuant to U.S. Public Law 116-94.
“The three-year period is expiring in 2022 for these 3,000 workers and it is important that we accelerate our request to U.S. Congress to extend the period as a result of the public health emergency, including local legislation necessary to ease the statutes governing the importation of foreign labor, specifically for construction workers,” he said.
His budget proposal also allocates $1,204,241 to the Commonwealth Utilities Corp. to defray utility consumption charges for the three branches of the government. He said additional allocation for the provision of government services to defray the cost of utilities is included in Volume IV (ARPA).
Torres first issued a budget call on Jan. 29, 2021, inviting all departments and agencies to begin the formulation of their agency’s program activities.