In a recent television interview the governor cited three points that he said would cause him to veto the current bill.
He said that the budget is not balanced. I disagree. The budget that is on his desk matches the revenue estimates from his latest official communication.
The governor went on to say that revenues are going to continue to decline. If he has knowledge of further declines in revenue estimates he is required to send a new official communication to the Legislature so it can be dealt with accordingly.
He went on to state that he doesn’t plan to approve a budget bill that does not include austerity measures. This illustrates a difference in philosophy about how to lower personnel costs. H.B. 16-213 contains a section addressing hiring. It uses attrition as the main tool for lowering personnel costs. The majority of positions which are vacated may not be filled. There would be a freeze on new hiring. There are certain exceptions which are clearly delineated, designed to preserve the provision of basic public services. Expenditure authorities are expected to make decisions about how to not exceed their appropriations.
I cannot support putting 64 hour work weeks in place while allowing hiring to continue without strict controls. Current employees of the government would be dealing with the impact of reduced wages while their losses fund new salaries.
I do not believe that the austerity measures as proposed by the governor are going to save enough in personnel costs to avoid overspending in FY 2009, particularly if hiring is not strictly controlled. The reality is that current economic conditions demand smaller and leaner government. We cannot have it both ways.
The governor also talked about administrative provisions in the budget bill declaring that some would make it difficult for him to manage resources. These provisions include the hiring restrictions and call for more frequent and detailed reports to the Legislature. These reports already exist and are being used by the Office of Management and Budget and the Department of Finance. The Legislature wants copies of them regularly and more often. Legislators must be able to see the results of the budgets they create. Reporting results are a valuable tool when planning for future budgets.
What we do know is that operating under continuing resolution has been a disaster. FY 2008 ended with $173 million in spending under a continuing resolution of $160 million. After some final adjustments and the last minute arrival of $17.2 million in a cover over settlement from the IRS the fiscal year ended with no operating deficit. It was good fortune, not good planning.
FY 2009 started with all being fully aware that estimated revenues were declining. The current projection is $148 million for general fund operations and another approximately $8.6 million in other resources totaling just under $157 million. With this knowledge, the first quarter ended with trends that forecast the spending of $180 million.
The continued practice of overspending simply makes no sense. The only reasonable course is to get a budget in place that will put a stop to it.
The budget bill that’s on the governor’s desk does just that. I hope that my colleagues will carefully consider the available options if H.B. 16-213 is vetoed. What we know as fact is that “business as usual” is not working.
SENATOR MARIA
FRICA T. PANGELINAN
Chairwoman,
Senate Fiscal Affairs Committee
16th Northern Marianas
Legislature
