Gov. Benigno R. Fitial, who has been pushing for the reimplementation of austerity Fridays or the forced shutdown of public offices every other Friday to reduce personnel expenses, ordered a cut on the appropriations of all government agencies by 7.25 percent on Tuesday last week,
The House of Representatives, whose leadership is dominated by the governor’s Covenant Party, shelved the austerity Fridays bill on Thursday.
According to the Finance Department, due to fewer business activities in the commonwealth, collections in terms of other taxes, license and other fees are also projected to go down, bringing the total projected revenue for FY 2010 to $137.350 million.
“We estimate BGRT collections for all of FY2010 to be $11,400,000 less than anticipated. In addition, the $4 million in [federal] ARRA State Stabilization Grant funding included in the original revenue estimate has to be deducted from the estimate as the final grant award treats $3 million as expense reduction related to the reduced Compact-Impact grant and $1 million as a specific grant for an upgrade to the financial management system,” acting Finance Secretary Robert Schrack reported to the administration.
Schrack noted that $2.25 million labor and immigration fees collected as a result of the delay in the federalization of the CNMI immigration system to Nov. 28, 2009 will offset the reductions.
The CNMI government currently operates on a $148 million continuing budget resolution in the absence of a new budget for the current fiscal year.
On March 9, Fitial informed the Legislature that he slashed the budget of all agencies by 7.25 percent.
“I am mandating immediate proportional reduction of 7.25 percent in the continuing budget authority of all branches, offices, departments, agencies and instrumentalities of the commonwealth, which are subject to appropriations. The effect of this reduction will be reflected in the budget authority remaining for the fiscal year,” the governor wrote on March 9 to
Speaker Froilan C. Tenorio, Covenant-Saipan, and Senate President Paul A. Manglona, Ind.-Rota.
“I realize this reduced budget allocation will have significant impact in government operations and services. However, the current financial condition of the CNMI requires that we quickly realign government spending with available resources,” the governor added.
He urged the heads of government agencies to examine their operations and identify areas where cost could be reduced or eliminated.
“We must continue to provide essential services related to public health and public safety, but there are many areas of operations where costs can be curtailed. As community leaders, the people of the commonwealth are relying on us to make the proper decisions in reducing the overall cost of government operations,” he said.
The revised FY2010 income taxes of the government, including the BGRT, totaled $86.8 million from $98.2 million.
Projections for excise taxes remain at $17.250 million; liquid fuel tax, $3.9 million; and $7 million for hotel occupancy tax, among other related-taxes.
The government’s collections for licenses and fees, however, are projected to go up to $8.5 million from $7.7 million while charges for services like hospital charges, among others, stood at $20.545 million.
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