The Saipan and Northern Islands Legislative Delegation explored ways yesterday to bridge the $2.65 million shortfall in the Settlement Fund, as Commonwealth retirees are owed $12.65 million compared to the $10 million allotted by the government coming from the Best Sunshine International, Ltd. annual license fee.
In a privileged motion that superseded two committee reports, Sen. Sixto Igisomar (R-Saipan) reiterated the need to prioritize Settlement funding in the face of House Local Bill 19-3 for a $1-million appropriation under Public Law 18-56, which is money allotted to the Third Senatorial District, and House Local Bill 19-30 for $1 million appropriation under Public Law 18-43, which are local revenues collected from poker fees.
Igisomar noted previous discussions with House members on the need to scrutinize appropriations.
“It has come to my attention and we’ve requested this before but only recently I’ve seen the numbers” that the 25-percent requirement for retirees is insufficient, he said. “Based on the numbers I’m looking at, we need $12.65 million for our retirees and although I know it’s coming from the Best Sunshine fee, only $10 million has been appropriated to the Fund, so we’re short about $2.65 million.”
Igisomar said there are other funding sources to make up for the shortfall, such as Public Law 18-30 or the Tourism Entertainment and Destination Enhancement Act of 2013.
“I believe the $1.27 million amount is available but, then again, I am not sure if that money is really available. On the other hand, based on the CNMI auditor’s report for 2014, there’s approximately $5.5 million that’s supposed to be in excess. I’m bringing this up not to create a conundrum amongst ourselves but to really focus on one item. I truly believe there are at least [three] important things to me that really matter: the retirees, medical referral, and the road problems,” he said.
Based on HLB’s 19-3 and 19-30 for a combined amount of $2 million, Igisomar said: “That’s $2 million available for appropriation. …Considering the crisis we have for the Retirement Fund, I’m hoping that we can come together and, if anything, go back to committee or discuss on the floor how best to appropriate $2 million that’s before us to take care of the 25-percent shortage,” he said.
Igisomar said one of the reason’s he ran for office is to mediate the retirement issue. “I truly believe this is a crisis and I wanted to make sure we at least use that money appropriately. …[The casino bill’s] primary intention I believe was for the retirees, then only after that [should] any sort of programs [be supported] for any negative impact that the casino will have on our citizens,” he said.
He noted that the legislative body requested from the Finance Department the need for accountability of the money that goes toward pensions.
“I don’t think we’ve really received certification on the accountability of the $1.27 million…or from the excess funds of $5.5 million in our auditing reports. To me, it does not necessarily mean that because they did not answer that, isao-mu ha’. I will continue forward, [even if] you did not answer and give us what we really want…and move forward with other priorities. I believe that in our hearts and everybody’s heart that the retirees are utmost priority [as well as] medical referral and other programs,” he said.
Senate floor leader Arnold Palacios (R-Saipan) said that after discussing this issue with several delegation members, “we’d like to raise concern on the settlement agreement of 25 percent. I believe 10 members of the present delegation…that passed the casino act…[in which] an exclusive license [was decided upon], when the 18th Legislature was deliberating the casino bill, the one compelling justification that a lot of the members came forth and used was to [meet] the 25-percent shortage for our retirees. Rightly so, that was a priority issue facing the Commonwealth…I believe the Executive Branch and the [Legislature] made a compelling argument that the government would make good on its commitment to provide funding to address the shortage.”
As recently as last week, Palacios said, he requested information on the Settlement Fund regarding the 25 percent breakdown and received a summary of breakdowns.
He states that in this breakdown of needed funding, retirees from Rota get $1.54 million, retirees from Tinian get $1.06 million, and retirees from Saipan get $12.65 million—for a total of $15.25 million.
“Today we only put aside $10 million for Saipan retirees, meaning that Saipan’s 25 percent is short of $2.65 million. To take from the points Sen. Igisomar brought up, we need to seriously revisit our priorities because what’s going to happen at the end of the fiscal year is potentially those retirees that we promised 25 percent [will not see those funds],” he said.
Palacios urged delegation chair Rep. John Paul Sablan (R-Saipan) and the delegation to consider appropriation bills in light of this compelling information, which is the main reason the casino law was passed.
“I recommend that the delegation reconsider referring these local bills back to committee for further consideration,” he said.
Sen. Justo Quitugua (Ind-Saipan) also requested from Finance Secretary Larrisa Larson information relative to the figures required to meet pension obligations.
“Just last week I was working with the Senate legal counsel in trying to look at ways for a 19th Legislature funding source to ensure that retirees get additional funds so their pensions come on time. If the 25 percent is short from the central government, the checks will not be released by the Settlement Fund. If that is really true than we are facing a tremendous situation with our retirees…the $12.65 million will increase because I understand that there are additional employees from our government that are retiring and are not included in the 25 percent that the central government calculated when the Settlement Fund was agreed upon,” he said.
Palacios reiterated that the Settlement Fund is not an automatic allocation and that it is authorized through the senatorial districts.
Some delegation members cited the unfairness of having to use SNILD funding for central government obligations, thereby neglecting community obligations.
Speaker Joseph P. Deleon Guerrero (Ind-Saipan) said: “I understand that the Settlement Fund refused to turn over those records [as per Finance’s request], consequently the only way to pay retirees [was made through the Settlement Fund]. This all points to the direction that the allocation is not correct. I think the long-term fix would have to be for us to re-evaluate Public Law 18-56 [since] tapping into these two appropriations is not the correct fix,” he said.
Rep. Ramon A. Tebuteb (Ind-Saipan) said the committee has still not received any assurances from the Secretary of Finance, with delegation chair John Paul Sablan noting that the administration needs to be part of the discussion on the 25 percent allocation.