Office of the Governor legal counsel Birnbrich says House trying to appropriate ARPA funds is simply inappropriate, illegal
Gov. Ralph DLG Torres slammed Friday the Democrats-controlled House of Representatives Majority leadership over their version of the Fiscal Year 2023 budget bill that he described as “irresponsible, negligent, and illegal,” by first reducing the funding for the Carolinian Affairs Office and other programs from departments and agencies, yet giving themselves an additional $1.2 million for House allocations.
At the same KKMP press briefing, Gilbert Birnbrich, the legal counsel for the Office of the Governor, said the biggest issue from a legal standpoint in the House’s version of the budget bill is the fact that the House was trying to appropriate the American Rescue Plan Act funds for various uses, which he believes is simply inappropriate and illegal.
Department of Finance Secretary David DLG Atalig, who also attended the press briefing, said the House version of the budget bill has the biggest red flags across the board.
Asked for comments, House Ways and Means Committee chair Rep. Donald M. Manglona (Ind-Rota) said yesterday that they are preparing a response.
Manglona is the author of the budget legislation, House Bill 22-116 in the form of HD2, that the House unanimously passed last Aug. 27.
Torres said what the House’s actions with the budget bill and in passing such unconstitutional legislation is really jeopardizing the whole government function not just the executive branch but as well as legislative and judicial branches.
Torres said the House submitted to the Senate last Aug. 29 their version of the FY 2023 budget, where they proposed to take away critical funding from healthcare, community and cultural programs, vocational rehabilitation services, and public and safety departments and agencies.
He said what bothers him the most is because the House Majority members are making so much an issue about Medicaid, the Department of Corrections, and all other agencies on lack of funding, lack of resources, but the first thing they did was cut critical government resources from essential government agencies and departments, in favor of giving themselves an additional $1.2 million for House allocations.
“I am deeply disappointed with the House Majority’s decision,” he said, adding that there is no right justification for them to increase them $1.2 million while slashing the budget of the Carolinian Affairs Office and other programs.
Torres said he is hoping that the House Majority members realize their action is unacceptable.
The governor said the House Majority also reduced funding from the Carolinian Affairs Office by $94,000, and slashed the Indigenous Affairs Office budget by $89,000.
He said after advocating to protect the CNMI’s veterans and thanking them and their families for their services, the House Majority took away $165,000 from Veterans Affairs.
Torres said the House Majority also took off $79,000 from the Women’s Affairs Office and a much needed $103,000 from the Office of Vocational Rehabilitation.
Regarding the Department of Corrections, the governor said despite the House Majority conveying concern about DOC’s lack of funding and manpower due to the COVID-19 pandemic and natural disasters, they subsequently decided to cut 56 of the critical full time employees (FTEs).
With respect to the CNMI Scholarship Office, Torres said the administration has been advocating for students as the next generations, and yet the House Majority decided to cut an FTE from that office and $151,000.
He said the House Majority also reduced 26 employees from the Department of Fire and Emergency Medical Services.
The governor said they talk about accountability, transparency, and helping the community, and yet they cut $973,000 from the Commonwealth Healthcare Corp.
Torres said he asked the Legislature to create revenue-generating bills and an incentive for new money to come in.
“I never asked them to go and increase taxes,” he said.
Torres strongly urged the Senate to make the necessary amendments to the budget bill in order to prevent the potential detrimental ramifications that the House’s budget version may have on the government’s critical functions, especially concerning public safety, healthcare, and essential community and cultural programs.
He said he is hopeful that the Senate can move forward on a true balanced budget and understands what ARPA can do, what Compact Impact and other outsource funding are meant for and not just appropriated by them simply because they’re the appropriation committee.
Torres expressed confidence that the Senate Fiscal Affairs Committee and the Senate Majority will consider his budget proposal that they submitted since April 1, 2022.
Office of the Governor legal counsel Birnbrich said there are issues with the House budget version and a couple of the issues involving the ARPA, Commonwealth Workers Fund, and other parts.
Birnbrich said because these ARPA funds are federal funds, and therefore, are heavily regulated for specific purposes.
“They are regulated by the federal government regarding how it should be spent and used, and as such, they are custodial funds,” he said.
Because of that, Birnbrich said, ARPA funds cannot be treated like general fund money.
He pointed out that the governor, under ARPA, has the authority to spend it, not the Legislature, and that Torres has a very well thought-out plan which the House pretty much ignored.
“So we believe that’s unconstitutional what they did by appropriating the ARPA funds,” the legal counsel said.
Birnbrich said the same for the CW funds, every year the CNMI gets money from the federal government for these Commonwealth fees for every foreign worker that a business goes out to hire for their business here in the CNMI.
He said the federal government under the law that created the Commonwealth workers says that this fund has to be spent in specific ways and that the CNMI has to come up with a spending plan and that it has to be spent on basically improving the local workforce.
“So the same as with like ARPA, it’s a very detailed plan. The funds are like grant money and because of that they cannot be treated like local money and cannot be appropriated by the Legislature in its budget,” Birnbrich said.
He said the spending plan and the spending authority is under the Executive Branch, or between the Office of the Governor and the Department of Labor.
Birnbrich said regarding the tobacco tax and sugar sweetened beverages tax that the House included in the budget, they were a little surprised that they put that in there because that is unconstitutional also.
“The constitution is pretty clear. We believe that the appropriation budgets are only meant to be for appropriations. You’re not supposed to put in anything substantive like amendments to laws, creating a whole new set of laws,” he said.
Finance Secretary Atalig said Torres’ proposal was to pay 80% of government employee salaries with the other 20% to be covered by ARPA.
However, Atalig said, the House reversed this proposal by appropriating only 20% of government employee salaries from the general fund, and the remaining 80% from outside sources.
He said the House assumed that ARPA can fund the 80% remaining for government employee salaries.
“That’s unallowable,” Atalig said.
The Finance secretary said there are limits in the provisions in government with regard to ARPA funding, and that the CNMI does not have the available resources in ARPA to cover 80% of personnel for the whole government.
Atalig also noted that the House took $20 million that is supposed to be reimbursed back to ARPA from Medicaid, and decided to use that amount for appropriations to different agencies, which according to the secretary is not allowable.