The House Ways and Means Committee chair, Rep. John Paul Sablan, speaks during a budget hearing for the Public School System in the House chamber on July 16, 2025.
Photo by Emmanuel T. Erediano
THE chairman of the House Ways and Means Committee on Tuesday acknowledged the possibility of austerity measures and a lawsuit by the Public School System if the CNMI government fails to provide PSS with its constitutionally required budget level.
Chaired by Rep. John Paul P. Sablan, the committee convened Tuesday and voted to recommend House Bill 24-50 for passage in the next House session. Authored by Sablan, H.B. 24-50 proposes to authorize the government to borrow $29 million from the Marianas Public Land Trust. The bill would allow MPLT to withhold the net annual distributable public land income due to the central government as loan repayment security.
The proposed $29 million MPLT loan was included in the original FY2026 budget submitted by the late Gov. Arnold I. Palacios in April 2025, which projected $179.7 million in revenue, $147.5 million of which would be available for appropriation. However, on Monday, the House unanimously passed H.B. 24-46, reducing the revenue projection to $132.3 million and appropriating only $127.4 million.
Sablan reiterated on Tuesday that should the CNMI government and MPLT strike an agreement on the $29 million loan, the goal is to restore the increases in appropriations for PSS and other agencies that the late governor proposed in his April budget.
The MPLT board of trustees has agreed to consider a low-interest investment proposal for the NMI government’s $29 million loan, which MPLT said requires legislation.
Asked by Rep. Angelo Camacho whether austerity is possible if the MPLT loan does not materialize, Sablan said, “Austerity is possible if anticipated revenues are not collected during the first and second quarters of the next fiscal year.” He emphasized the need to pass the MPLT loan bill to replenish the amounts reduced by H.B. 24-46 from the originally proposed budgets of government agencies.
Noting that H.B. 24-46 allocates only $31.7 million for PSS, Rep. Joel Camacho asked what would happen if PSS moves forward with a lawsuit. Sablan said the committee has discussed the proposed budget and the MPLT loan with the Board of Education and PSS management.
Education officials have outlined several scenarios, including pursuing the full $49 million budget or the $40 million originally proposed in FY 2026. Sablan added that once H.B. 24-50 passes the Senate and is signed into law, the administration will need to submit a supplemental budget.
Article XV, Section 1(e) of the CNMI Constitution mandates the Commonwealth government to guarantee 25% of its general revenue for the public education system.
