THE administration’s $216.68 million budget proposal for fiscal year 2003 “remains valid,” acting Gov. Diego T. Benavente said yesterday, but House Speaker Heinz S. Hofschneider believes that the revenue projection is “a bit optimistic.”
The government’s revenue projection for FY 2002 also remains unchanged—it still stands at $193.36 million, Benavente said in his report to the Legislature.
Hofschneider, in a separate interview, said the collection of the last seven months “is already indicative that the government would be unable to meet the revenue target.”
The revenue could amount to only $182.7 million, Hofschneider, R-Saipan, said. “So why would the Legislature pass a budget that is $30.3 million off the mark?”
He said he would not support any deficit spending proposal.
Benavente, in the report, said actual government earnings and revenue collections totaled $121.8 million in the first seven months of FY 2002, with collections in most areas returning to FY 2001 levels.
However, he said revenue from poker arcades may decline by $2 million following the recent enactment of Saipan Local Law 13-8 which raises the island’s local poker license fee from $2,000 to $6,000 per machine.
It is “too early to tell” because the Department of Finance’s projection was based on a “few weeks” review, but Benavente said the administration is prepared to offset the projected $2 million loss by increasing the tax on poker jackpots from 10 percent to 20 percent.
This supplemental revenue measure has also been submitted to the Legislature which has to pass it.
Without this supplemental revenue measure, the administration would have to reduce its FY 2003 budget proposal, Benavente said.
He said the general fund expenditure for the current fiscal year as of May 31 was pegged at $143.5 million.
At the current rate of spending, total expenditures will reach $213 million—resulting in a deficit of $19.6 million.
However, the projected deficit has been reduced by $8.5 million in the last three months, and is expected to “fall even further” as long as the three branches of the commonwealth government “continue to exercise expenditure controls,” Benavente said.
The budget deficit still “remains concentrated” in the Departments of Public Safety and Public Health, and in “government-wide utility costs,” he said.
“All other areas of the government have been able to function with reduced expenditure authority,” Benavente added.
