With the majority’s consent, Speaker Arnold I. Palacios, R-Saipan, agreed to confer again with the Senate on a new spending limit for the CNMI government without the projected deficit of over $9 million.
The committee’s final recommendation was for a $156.7 million budget.
But without the provisions for the austerity and unpaid holidays, the joint committee said there will be deficits.
“Although it is required that the governor submits a balanced budget proposal, this did not occur,” the committee report stated. “The method by which the governor arrived at an estimated zero operating deficit for FY 2009 was by implementing austerity Friday and [unpaid] holidays as well as an 11 percent defined benefit plan employer’s contribution.”
The report added, “The compromises arrived at by the joint conference committee creates a proposed budget that is in excess of the estimated resources available for FY 2009 by $9,097,361.”
This shortfall is projected to be offset by the cover-over taxes that the CNMI anticipates to receive from the U.S. Treasury.
But with negotiations still ongoing for this latest reimbursement, House lawmakers said the cover-over taxes must first be identified and should not be included in the projected revenues until the CNMI receives the funds.
At least $100,000 of the projected deficit would be used to finance the salaries of an executive director and other employees who will oversee the proposed CNMI office in Manila to process the nursing license of applicants from the Philippines.
The office will charge $100 per applicant and is projected to collect up to $1 million in one year.
This proposal is the only additional revenue source mentioned in the report.
The Department of Finance reported to the Legislature that the overall government deficit for FY 2008 would reach about $40 million when the unpaid contributions to the Retirement Fund are taken into account.
The committee said it will work on a plan to address this issue.
The current budget amounts to $163.2 million.
