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Last updateTue, 22 Oct 2019 12am







    Sunday, October 20, 2019-9:21:16A.M.






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NMI high court looks into PSS budget dispute

THE Public School System and the CNMI government are asking the local Supreme Court to clarify what constitutes the government’s “general revenue.”

The questions presented for certification are:

1) What sources of income must be included in determining PSS’ “guaranteed annual budget of not less than 25 percent” of the general revenues of the Commonwealth? In particular, what sources of income can be properly earmarked without depriving PSS of its constitutionally guaranteed budget?

2) Can the Legislature properly suspend an earmark in an annual appropriations bill? If so, does the suspension transform the income source into “general revenue?”

3) In the case of supplemental budgets, is PSS entitled to 25 percent of each supplemental budget during the course of a fiscal year or is PSS entitled to 25 percent of the total “general revenue” generated annually?

Under the CNMI Constitution, PSS is entitled to an annual budget equivalent to at least 25 percent of the government’s general revenue.

In August, PSS sued the CNMI government, seeking to clarify what constitutes the government’s general revenue. The agency withdrew the lawsuit after Gov. Ralph Torres  agreed to work with PSS on submitting a certified question to the CNMI Supreme Court.

The Board of Education, represented by Special Assistant Attorney General Tiberius D. Mocanu, wants the court to rule that “general revenue” includes all general taxes, and only excludes earmarks consisting of revenue streams generated from specific taxes that are deposited into special accounts and appropriated for particular purposes by statutes codified in the Commonwealth Code.

PSS asserts that it is entitled to 25 percent of the total gross revenue tax, inclusive of the sums designated to the Settlement Fund Revolving Fund Account and the Casino Gross Revenue Tax Account.

PSS also contends that the CNMI Legislature does not have the power to suspend statutory earmarks in appropriations bills, and the proper recourse is to amend the statute designating the earmark.

If the Legislature does in fact have that power, Mocanu said, then the suspension of a statutory earmark in an appropriations bill transforms the earmarked revenue into “general revenue.”

Representing Governor Torres, Charles Brasington, chief solicitor of the Office of the Attorney General, and Gilbert J. Birnbrich, legal counsel of the Office of the Governor, contend that general revenue does not include portions of tax revenue that are appropriated for specific purposes by statute.

They cited for example one particular statute, which designates various sums of the gross revenue tax to the Settlement Fund Revolving Fund Account. Another similar statute  designates the gross revenue tax from the exclusive casino licensee to the Casino Gross Revenue Tax Account for certain purposes.

The CNMI government also said “the Legislature has the power to suspend statutory earmarks in the annual balanced budget as may be necessary to fund Commonwealth programs, and that the suspension of statutory earmarks does not transform the earmarked revenue into ’general revenue.’”

PSS is only entitled to 25 percent of general revenue appropriated throughout the fiscal year, and not 25 percent of the general revenue appropriated in each budget bill, the central government lawyers said.

“For example, assume the annual budgetary appropriation of ‘general revenue’ is $200,000,000, and two supplemental appropriations for $25,000,000 each are passed during that fiscal year. Under this situation, the governor contends that PSS is entitled to $50,000,000 of the annual budgetary appropriation and an appropriation of $12,500,000 by the end of that fiscal year.”