Rep. Blas Jonathan Attao, left, speaks during a House Special Committee on Federal Assistance and Disaster-Related Funding meeting earlier this month.
THE House of Representatives on Thursday unanimously passed House Bill 23-104 to prevent the reduction or suspension of 25% of the CNMI retirees’ pension on April 15.
All the 15 House members present voted to pass H.B. 23-104, which now goes to the Senate. Reps. Roy Ada, Thomas John Manglona, John Paul Sablan, Ralph Yumul and Denita Yangetmai were absent.
Under a settlement agreement approved by the District Court for the NMI, the CNMI government committed to pay at least 75% of the retirees’ benefits.
But since the Inos administration, the CNMI government has been voluntarily paying the 25% benefit of the retirees, which costs about $13 million a year.
“We are in a really bad financial situation,” said Rep. Blas Jonathan Attao, the author of H.B. 23-104, during a House session on Thursday.
He told his colleagues that even though the governor has 100% reprogramming authority, “the funds are depleting pretty quick, and on top of that they still need to satisfy the 25% [for] the Public School System and the payment for our current employees of the government. A lot of [them] have already taken a 10 … hour reduction in their pay.”
Attao’s H.B. 23-104 proposes to appropriate $5.2 million of the dividend collected by the Commonwealth Economic Development Authority from the Commonwealth Utilities Corp. to pay the 25% benefit of retirees of Saipan, Tinian and Rota.
In 2009, CUC and CDA entered into an agreement to convert the public utility’s $45 million loan to preferred stocks with a 2% dividend rate. Under the agreement, CDA would receive about $1 million in annual dividend from CUC.
H.B. 23-104 also requires the Finance secretary to remit funds to CEDA for the repayment of the $5.2 million. The intent is for these funds to retain their local nature, and after repayment, these funds may be used in the future to address local matters of Saipan.
According to the bill, “The Legislature is well aware that funding retirees’ pension for all retirees of the CNMI cannot be compromised and cutting additional hours from the hardworking employees of the government will be detrimental to their livelihood.”
Attao said, “If we don’t act on this legislation at the soonest, the guarantee is that the [retirees’] 25% will be reduced if not suspended by April 15.”
“That is why we need this legislation passed. And we hope that when it gets to the Senate, they would do the same thing,” he added.
He described H.B. 23-104 as an “act of sacrifice” by the Saipan and Northern Islands Legislative Delegation because the CEDA dividend from CUC belongs to Saipan.
But he said this sacrifice is needed to make sure all the retirees in the CNMI receive their full pension.
Another ‘Band-Aid’
Rep. Vincent S. Aldan said he doesn’t like the bill, although he understands that it needed to be passed.
He added that what he was about to say “is probably political suicide but I’ll say it anyway … I would rather be sitting here being honest than not to bring up my true sentiment.”
He said the word “sacrifice” has been “used up, chopped up, flipped all over the place and it’s completely overused.”
Aldan said the bill offers a temporary solution — “a Band-Aid solution…. What are we going to do tomorrow? This thing is not going to last,” he added.
He said, “The reason why we are in this predicament is our financial house is in complete disarray. There is no money. And we cannot keep the status quo as is. And whether we like it or not, the executive branch, as much as it’s trying to find out where to get money, it also has to reduce its spending.”
Aldan added, “The government needs to reduce itself. Its biggest expense is personnel. So if we want to get a solution, our best solution is to cut government jobs. Period. Whether we like it or not, somebody has to go.”
He said, “If I lose the people’s seat I’m sitting on right now in the upcoming election so be it. But at least I’m honest. The government has to do its job. The executive branch has to do its job. They have to cut cost…. This five million [dollars] is … a drop in the bucket…. What’s gonna happen next year? Because once this … money is done…. How long did it take CEDA to come up with this $5 million dividend? Are we going to have the same thing next year or the following year after that? … The executive … branch has to do its part and they’ve got to reduce their spending — they’ve got to control their spending.”
