GOVERNOR Arnold I. Palacios told the Board of Education on Friday that education is on top of his priorities.
He attended a special board meeting during which litigation related to the funding of the Public School System under Article XV of the CNMI Constitution was listed as item “Number 10” under “New Business.” The BOE voted to discuss the matter in executive session — a closed-door meeting that will resume on Wednesday.
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.
In his proposed fiscal year 2026 budget, the governor said the total identified projected revenue is $179.7 million, of which $40 million would be allotted to PSS. However, 25% of $179.7 million is $44.925 million.
“I come to you to express my concern on the litigation that is on your agenda today,” the governor told the BOE members.
He said PSS remains “on top of my priorities.”
“The education of our community is on the top level of the tree. The other one is the court-mandated [payment] to the Settlement Fund and the Medicaid local match which is up to $9 million annually,” Palacios said.
He said from $27 million when he came to office two years ago, he, with the assistance of Office of Management and Budget Special Assistant Vicky Villagomez, Finance Secretary Tracy B. Norita, and Treasurer Connie Aguon, was able to increase PSS’s budget to $33 million.
But in doing so, he said, he had to figure out which other agencies in the CNMI government would get a cut in funding and where to find additional funding for PSS.
The governor said there are other obligations the government has to meet, such as medical referrals, which he described as also critical. He said it would be “very heart-breaking” to say no, for example, to an individual who needs emergency off-island medical care.
It’s been a big challenge in the last two and half years, he said, adding that he needed to tap into other sources of funding “from everywhere” while eliminating some programs in the executive branch.
“If I have to furlough people [and] if we have to set aside vacant positions, I will do that. I have to make difficult decisions,” he said.
PSS is seeking $49 million for FY 2026. Palacios said his reaction was, “Okay, let’s start with $40 million.” He had to make changes to his FY 2026 budget submission and “that’s what I did, just like I did before.”
“And I can tell you now, without any hesitation, of my commitment to PSS, to making sure that we have adequate resources for the board and teachers and everybody, making sure that our students have the education that [they need],” Palacios said.
He urged the board to reconsider an “adversarial approach to fixing the gap, in the 25% [mandate].”
Unlike other government boards, the BOE’s five voting members are elected by the public.
