Proposed constitutional change to cap annual budget at $104.32M


Saying that it’s about time the government pay its obligations, retire its deficit and right-size it, Sen. Paul Manglona (Ind-Rota) pre-filed Friday a proposed constitutional change to cap the annual government budget at $104.32 million and require any surplus revenue collected to pay for retirement fund obligations such as the settlement agreement and restoration of 25-percent pension cut, as well as land compensation.

“It’s time to take seriously the liabilities of this government,” Manglona told Saipan Tribune.

If Manglona’s Senate Legislative Initiative 18-3 passes the Senate and House, it will then be presented to voters.

Voters would then have to decide whether or not they want a cap on the budget so that anything in excess of $104.32 million would be used for Retirement Fund-related obligations and land compensation “until all government debts are paid in full.”

A trust account will also be established for any surplus funds under the initiative.

The fiscal year 2013 budget was $114.32 million, but deducting the $10 million set-aside for the Retirement Fund at the time, the amount becomes $104.32 million, which is the cap that Manglona is proposing.

He said at the time, that amount was sufficient to cover government operational expenses.

“The government should be restricted from increasing its operation expenditures until such time that the retirees’ pensions are restored to 100 percent as required by law,” Manglona said in his initiative.

The fiscal year 2014 budget went up to $123.4 million, but the money set aside for the Fund was doubled to $20 million. However, the government needs at least $5 million more to meet the minimum guaranteed payment of $25 million to the Fund settlement agreement for fiscal 2014. The government’s annual payment increases until it peaks at $45 million in fiscal 2018. After that, the amount starts to decrease.

Manglona said the CNMI has been experiencing an increase in revenue because of increased number of tourist arrivals the past three years. However, its obligations related to the Fund and land compensation, among other things, continue to mount.

Haidee V. Eugenio | Reporter
Haidee V. Eugenio has covered politics, immigration, business and a host of other news beats as a longtime journalist in the CNMI, and is a recipient of professional awards and commendations, including the U.S. Environmental Protection Agency’s environmental achievement award for her environmental reporting. She is a graduate of the University of the Philippines Diliman.

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