SENATOR Paul A. Manglona has introduced Senate Legislative Initiative 22-6, which proposes “to create a rainy day fund.”
Paul A. Manglona
S.L.I. 22-6 will amend Section 9(a), Article 3 of the CNMI Constitution “to cap the government annual expenditure level to $190,000,000 and to require any surplus revenue collected to be deposited into a Budget Stabilization Fund, also known as a rainy day fund, to be created by law.”
According to the legislative initiative, the $190 million expenditure cap “shall not be increased in any future fiscal year except for a maximum three percent annual budget adjustment.”
“Any surplus revenue shall be deposited into the Budget Stabilization Fund, provided that the funds shall only be appropriated in times of unexpected revenue shortfall or budget deficit by an affirmative vote of three-fourths of the members of each house in a joint session of the legislature,” the legislative initiative stated.
In a statement on Tuesday, Manglona said the CNMI government is facing an unprecedented fiscal and economic crisis due to “uncontrolled government expenditures over the last five years and the drastic reduction in revenues due to the Covid-19 pandemic.”
“We all know our government needs to do [a] major readjustment of the CNMI budget,” he said.
“In order to avoid repeating past mistakes and to put our government on a sustainable financial course, we must have effective financial control in place to reduce and eliminate operating deficit, and criminal penalties for budget [overspending],” the CNMI’s longest-serving lawmaker said.
