Gov. Benigno R. Fitial who vetoed the budget bill on Wednesday, urged the Legislature to re-implement austerity Fridays, introduce unpaid holidays and reduce remittances to the Retirement Fund.
“These cost-cutting measures are critical to meet our constitutional requirement of a balanced budget and to continue delivering services to the people of the commonwealth…. I am returning House Bill 16-169, HD9, SS1, CC2 disapproved,” said Fitial in his veto message to the Legislature.
Finance Secretary Eloy Inos said collections from business gross receipts tax, income and excise taxes, liquid fuel tax, beverage container tax, poker license fees, among other fees and taxes, are projected to go down by $8.6 million as a result of the further weakening of the local tourism industry and the anticipated end of Saipan’s garment production in FY 2009.
Inos said the CNMI has nothing significant to cushion the impact of this economic contraction.
“The original revenue budget submitted for fiscal year 2009 was $156,703,000 as adopted under House Concurrent Resolution 16-2. We propose a revision to this revenue budget down to $148,084,000, a net reduction of $8,619,000,” Inos told Gov. Benigno R. Fitial in a memorandum.
“Barring any unforeseen and/or extraordinary events which might affect the revised estimates, we determine with reasonable certainty that the amount of internal resources that the CNMI will receive this fiscal year will be approximately $148,048,000,” he added.
Conflicting provisions
Inos said some of the revenue estimates cited in House Bill 16-169 or the FY 2009 budget are not reliable sources of funds.
“These include the recommended increase in the various license fees, as well as the uncertainty in the collection of receivables,” he said.
According to Fitial, “The revised estimate shows a net reduction of $8.6 million. Two major sources of the decline in government revenues are the confirmed reports of the closure of three of the four remaining apparel manufacturers and the discontinuation of the Osaka-Saipan direct route by Northwest Airlines. This is a considerable reduction in resources that will not support the implementation of the programs proposed under the budget legislation.”
He said he also vetoed the budget bill because of its “conflicting and impractical sections.”
For instance, he said, a provision raises the salaries of resident department heads by $9,000 per annum or from $36,000 to $45,000 while capping at $40,800 the annual salaries of division chiefs and special assistants.
Another provision dropped to $186,356 the $200,000 annual lease payment for the La Fiesta mall land lease.
The government must pay $200,000 annually for the next 20 years to pay off the balance of the $7.5 million mall that was acquired in 2005 for the defunct Pacific Gateway Project of Northern Marianas College.
Fitial also noted that the budget bill did not include a separate appropriation for NMC’s utilities.
