Palacios, R-Saipan, has asked the Senate to work with the House on a revised appropriation bill for FY 2009 which began on Oct. 1.
The governor is asking the Legislature to include provisions that will re-implement austerity Fridays, implement unpaid holidays and further reduce pension payments to the Retirement Fund.
The House rejected the Senate budget version containing such provisions.
The final version which Fitial rejected, allows each department head to decide how to cope with their meager budget.
The bill proposes a $156.7 million spending level.
Palacios said when the House Ways and Means Committee finalized the budget appropriations, there was still money available to avoid the austerity holidays.
But now that the government is expecting reduced tax collections, the speaker said the reinstatement of austerity holidays, which will shut down public offices every other Friday, may be considered.
“That has always been an option,” he told the Variety in an interview yesterday.
But he stressed the House leadership will continue to explore other alternatives in consideration of the lowly paid public servants.
Rep. Ray N. Yumul, R-Saipan and chairman of the House Committee on Ways and Means, said the governor’s recommended budget will mean a further 10 percent cut on the budget of all departments and other government agencies.
He said the House-Senate conference committee will come up with a position on the issue and will response accordingly to every point made by the governor in his veto message.
“We’re going to draft a joint position. This is a very big concern for us. This would mean another 10 percent reduction in our budget,” he said.
The Department of Finance 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 further by $8.6 million as a result of further weakening on the local tourism industry and the anticipated end of Saipan’s garment production industry this FY 2009.
The CNMI has nothing significant to cushion the impact of this economic contraction, Finance stated.
