He said while the local business community is sympathetic to the plight of the public sector employees, the government has to reduce its bloated workforce.
According to Brennan, acting Finance Secretary Robert Schrack was quoted by the Senate Fiscal Affairs Committee as saying that despite an original FY 2010 revenue estimate of $137 million, and despite the governor’s 7.25 percent across-the-board reduction of allocations for all government departments, agencies and municipalities, the commonwealth government’s expenditures will exceed $150 million for this fiscal year.
“This demonstrates a lack of compliance with laws and regulations and a lack of will that should frighten every taxpayer and voters in our community,” Brennan wrote to House Ways and Means Committee Chairman Ramon S. Basa, Covenant-Saipan.
“The commonwealth government can no longer continue to live outside its means and neither can it continue to try to accommodate its failings through increasing taxes and fees that are ultimately paid for by individual consumers at the cash register and which deter potential investors and further harm existing businesses and the economy,” he added.
Basa sponsored House Bill 17-45, or the Pay Reduction Act of 2010, which will reduce government work hours to 70 from 80 every payroll.
But the Senate amended Basa’s bill and replaced the work-hour reduction provision with three unpaid legal holidays and an increase in taxes on alcohol, beer, poker license fees, among other things.
Brennan said the chamber has no strong position on the austerity measure but stressed that if the Legislature passes it, it should not endanger the federal grant money intended for the Public School System.
PSS warned it may lose the second phase of its State Fiscal Stabilization Fund under the American Recovery and Reinvestment Act and it may also reimburse the first phase grant amounting to $16 million if its budget is further reduced.
Brennan noted that the CNMI government’s proposed $137 million budget for FY 2010 is the lowest since FY 1993 and yet further deficit is projected.
He said the government should not be exempt from painful cost-cutting measures as is the case now in the private sector which has reduced benefits, work hours, wages, or terminated employees because of the economic depression in the CNMI.
“Cost-cutting is painful for employers, and it is painful for employees when it impacts their salaries.
Unfortunately, it is a fact of life when business is bad. The commonwealth government should not be exempt from this reality. Government employees are not alone in feeling the pain of budget reductions,” said Brennan.
“The government should reduce its expenditures to an amount less than or equal to its revenues.”
