In the absence of a new budget, the cash-strapped CNMI government’s spending limit for the current fiscal year reverts to the previous year’s budget amount of $148.5 million.
Palacios, R-Saipan, in consultation with House chief legal counsel Antonette Villagomez, said the FY 2009 budget sets at 11 percent the employer contribution.
But the trial court has ruled that the Fund should be paid 16 percent, he added.
“The fact that we don’t have a budget doesn’t change the court ruling,” said Villagomez.
A previous law sets the rate at 18 percent in case no new budget is passed.
But the speaker said acting Finance Secretary Robert Schrack is mandated to pay the Fund 16 percent with or without an enacted budget or he will be cited for contempt.
He said Schrack, in his current capacity as acting finance chief, must find the equivalent of the remaining 5 percent to fully cover the 16 percent premium since only 11 percent is budgeted last fiscal year.
The Fund won by default its lawsuit against the CNMI government last year.
The court said the government owed the Fund $231 million in unpaid contributions, including interest, as of April.
The House of Representatives passed on Sept. 22 the administration’s proposed $150.5 million budget bill for FY 2010.
The bill remains pending in the Senate.
Palacios said the budget is always a contentious issue and he expects the Senate to propose amendments.
“A conference committee should be called then,” he added.
