PSS to cut personnel expenses by 40%

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THE Public School System has to reduce its personnel expenses by 40% to keep its schools open in the new school year, Associate Commissioner of Administration Kimo Rosario said.

The administration said  $82.6 million only is available for government appropriation in fiscal year 2021, which will start on Oct. 1, 2020.

Of this amount, the administration has proposed $20.6 million for PSS which, under the Constitution, is entitled to at least 25% of the general revenues.

Rosario said because  PSS has $6 million left from the $23.1 million Education Stabilization Fund it received from the CARES Act, the school system will have a total budget of $26.6 million for FY2021.

In FY 2020, PSS requested a $66.8 million budget and was allotted $37.7 million — $34 million for personnel and $2.9 million for operations.

But due to the Covid-19 pandemic that devastated the global economy, including that of the CNMI, the Commonwealth budget amount for FY 2020 dropped to $77.1 million from $148.8 million. Like the other agencies, allotments for PSS were reduced significantly. 


Board of Education Chairwoman Janice Marie A. Tenorio, left, front row, Commissioner of Education Dr. Alfred B. Ada, far right, Associate Commissioner of Administrative Services Kimo Rosario, second left,  and other education officials attend Monday’s budget hearing in the House chamber. PSS photo

According to the recent budget submission of the administration, PSS requested $40.6 million for FY 2021, but the administration could propose $20.5 million only for the school system.

Rosario said PSS should bring down its payroll from $1.3 million to $884,000 biweekly to ensure that “we live within our means and spend within budget authority to avert payless paydays, furloughs, reduction in force and incurring a shortfall and deficit next fiscal year.”

PSS has already implemented a 64-hour work schedule and a 20% pay cut affecting 654 certified and non-certified employees. 

This will translate to an annual savings of $6.7 million, Rosario said.

On Monday, July 6, PSS implemented a new organizational chart, which, in effect, reduced the salaries of school administrators, directors, program managers, education specialists and coordinators by 25%, which will result in $1 million savings.

Rosario noted that “even if we reduce the salaries [of key managers] by 100%, PSS will  realize 3%-5% in savings only.”

He said the other classes of employees outnumber PSS officials by 7 to 1. “Contrary to the misguided belief that PSS’ upper management is ‘top heavy,’ the truth is the bulk of our personnel expenses [goes to our] certified employees.”

He said PSS may also stop paying for the employer share of an employee’s insurance, adding that this may reduce payroll costs by 14% or a $3.6 million savings annually.

“Employees must get their own [health and life insurance] individually,” Rosario said. “At this juncture, and like the rest of the government, PSS can no longer afford a 70-30 cost share payment plan.”

PSS is paying $140,000 biweekly as its share of the employees’ insurance payments while employees pay $40,000.

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