Gov. Benigno R. Fitial decided to include fully federally funded employees (FFEs) on Oct. 25 for reasons of “fairness and morale.”
As detailed yesterday in Variety’s “Federal salary cuts violate budget law” article, FFE’s concluded the governor’s decision was illegal with regard to the budget’s authority language.
Capital Hill Reaction
Yesterday morning, Variety visited the legislature to solicit comments concerning the accusations of the FFE’s under austerity measures.
House Speaker Eli Cabrera (R-Saipan) stated his belief that the governor exercised his authority properly even in light of the budget language that exempted the FFEs, but has requested copies from the governor’s office of letters from federal granting agencies approving the plan to reprogram money from salaries to other uses.
The House legal Counsel, John Cool, said he would reacquaint himself with the bill’s language and provide a statement after the review.
Senate President Paul A. Manglona (Ind-Rota) instructed Senate Legal Counsel Antonette R. Villagomez to conduct an immediate review of the budget language.
When asked what the next step would be if the governor had exceeded his authority, Manglona noted, “The legislation would need to be amended to provide such authority.”
The office of the Attorney General confirmed to Variety on Dec. 2 that the governor requested its legal opinion on the issue of reprogramming grant money and the preliminary conclusion was that yes, the authority was supported by the fact that the governor was cited in the grants as the major recipient.
The AG’s office however continues the review and expects to render a final verdict this week.
A reaction from the AG concerning the additional budget language issue was unavailable at press time as was a statement from Lt. Gov. Eloy Inos or his Legal Counsel Teresa Kim-Tenorio.
Effects of Austerity on Programs
Variety interviewed FFEs in five different affected programs and received the same feedback from all; austerity had an extreme negative impact on their programs.
Apparently, word has reached higher powers in the grant programs as one staffer stated that off-island program evaluators had visited their office three times while another cited one visitor in the last month.
All federal program employees represented by those Variety interviewed on the requested condition of anonymity expressed frustration about a failure to meet enforcement, inspection and oversight program goals as stated in the grants.
Economic impacts of austerity on fully federally funded grant employees include both internal and external consequences.
In addition to grant staff being unable to fulfill their stated objectives and the government’s fiscal liability to pay back grants for employee benefits money, there exists an irony the staff pointed out that provided a laugh.
As explained earlier, staff benefits cannot be legally reduced and so employee vacation days accumulate faster for less working days, but the flip-side of the coin is that they have 25 percent less money to take a vacation.
As one employee quipped, “How crazy is that?”
For the broader community impact, the calculation of lost economic stimulus was calculated with the standard 0.8 consumer multiplier (for every one dollar made by a worker, 80 cents is plowed back into the economy via a purchase).
Variety calculated the lost community income at over $2,000,000 (FFE salary reductions totaled $2,571,676 multiplied by 0.80 percent).
What’s Next?
The legal reviews continue in various agencies on the two key issues.
Did the local budget language provide the governor authority to cut FFE salaries?
Secondly, have the federal agencies provided approval of grant money reprogramming as the governor’s office claimed?
While grant staff await the legal conclusions and proof to these two questions, they also anticipate Babauta’s visit for an indication as to which way the winds will blow.
“If Asst. Sec. Babauta plays nice and doesn’t make a statement on our behalf … our holiday hope will disappear … just like 20 percent of our pay,” stated a tired and anxious manager.
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