By Gemma Q. Casas
Variety News Staff

THE administration says the Legislature should revise the government’s budget as soon as it can as tax collections continue to shrink due to the worsening economy.
In a letter to the Legislature, Gov. Benigno R. Fitial said the necessary adjustments to the fiscal year 2007 budget must begin this third quarter.
The governor said Finance Secretary Eloy Inos has advised him that the budget cannot be met given the “accelerated closure of garment factories and departure of affected nonresident workers.”
“The revenue estimate stands at $163.285 million for FY 2007 reflecting a decrease of projected revenues necessary to support our current budget per P.L. 15-28 of $193.458 million,” the governor said in a letter dated Feb. 28 to Senate President Joseph M. Mendiola, Covenant-Tinian, and Speaker Oscar M. Babauta, Covenant-Saipan.
The governor told them to mandate “an immediate proportionate reduction in the current budget authority of all branches, departments, agencies and instrumentalities of the commonwealth for the remainder of the year.”
“I will forward you a proposed amended budget for FY 2007 in the next 30 days to ensure continued essential services for the remainder of the fiscal year,” he said.
According to Inos, tax collections from businesses and individual taxpayers have dramatically dropped during the year.
He said revenues generated from licenses and fees are projected to drop by $8.72 million.
Collections from business gross revenue taxes, wage and salary taxes, garment user fees, hotel occupancy taxes, and excise taxes will also drop by $21.478 million this fiscal year, Fitial said.
The total projected revenue shortfall this fiscal year will reach $30.198 million.
Babauta, in an interview on Friday, said lawmakers will look into the new figures presented by the administration to see how the reductions could be equally distributed.
He said mass layoffs will be the last option.
“No layoffs. That’s the last resort. What we would like to see is a further reduction in operations costs. More in-house austerity measures like the proper use of office supplies and no overtime,” said the speaker.