Like the governor’s proposal, both measures propose a $156.7 million general fund spending level for FY 2009, which started on Oct. 1. This figure does not include the $3.08 million budget of the Department of Public Lands, which is self-funded.
But unlike H.B. 16-169 House Draft 9, the Senate bill removes the 409 full-time equivalent, or employee, positions that are vacant, and includes austerity Fridays and austerity holidays, which key House members oppose.
Pangelinan, however, indicated that the alternative to austerity measures is laying off personnel.
In an interview, she said her committee will most likely meet tomorrow to discuss her report.
The Senate may pass its version of the budget bill this week, she said, and is ready to “sit down” with the House to draft a budget acceptable to all lawmakers.
“I learned what the House did with the budget bill by reading the newspaper — I don’t think that’s how we should work, Pangelinan said. “I hope we can pass a budget for FY 2009. It’s not an issue of what version ‘wins,’ but of protecting taxpayer money and ensuring that we provide the community with vital public services.”
Since 1998, the CNMI government has enacted only three budget laws and is currently operating under the spending ceiling set by a budget passed in 2006.
Plenty government employees
According to the senator, the law requires that a vacant FTE not filled within 180 days must be eliminated. “Our review of the budget proposal revealed that at least to some extent, this law has not been followed,” she added. Her bill, “in most instances” eliminated them.
The senator said her review stated that there are 3,792 persons employed and paid from general fund appropriations.
This figure, however, does not include the employees of the Legislature, DPL, the Government Health & Life Insurance, the Commonwealth Development Authority, the Commonwealth Ports Authority, the Commonwealth Utilities Corp., the Retirement Fund, the Northern Marianas Housing Corp., the Office of the Public Auditor and the Marianas Public Land Trust.
Pangelinan noted that funding for the employees of lawmakers, the Marianas Visitors Authority and MVA were listed in “all others” in the House bill.
This, she said, “distorts” the government’s “true personnel costs.”
Austerity measures
Under H.B. 16-169, HD9, Senate Substitute 1, 14 official CNMI holidays are declared austerity holidays. Public employees who do not work on an official holiday will not be paid, which will save the government at least $3.5 million, according to Pangelinan’s report.
Her proposal also includes 12 austerity Fridays that were first implemented in FY 2007. Under this measure, government offices will shut down every other Friday.
The Public School System and NMC will not be exempted from austerity holidays and austerity Fridays, but their “application…must be balanced with the needs of students and accreditation requirements.”
They are also allowed to retain savings they may realize for purchasing textbooks and classroom supplies.
Pangelinan, in her report, noted that there will be situations where employees must work on a Friday as in the case of Public Safety, Corrections, Public Health and the judiciary.
Moreover, she said, some employee salaries are constitutionally protected — the governor’s, the lt. governor’s, the justices’ and judges’.
But these officials will be allowed to “participate, in whole, or in part, in this austerity measure.”
The committee, she said, “acknowledged that these [austerity] measures create hardship, particularly for those with lower salaries, yet…their implementation [will] lower personnel spending…, maintain adequate numbers of personnel needed to provide basic services to the people of the CNMI, and…cushion employees from the even more difficult circumstance of total unemployment.”
Inconsistencies
Pangelinan, D-Saipan, said her substitute bill is based on a review of the governor’s budget proposal and H.B. 16-169, HD9.
The governor’s proposed costs for each government unit were examined and the committee requested personnel information from departments, agencies, programs and other instrumentalities.
Pangelinan discovered “inconsistencies between the job codes for individual employees and their titles, and in some cases, between the job codes, the titles and the pay grades assigned.”
These, and mathematical errors found in the governor’s proposal amounting to $778,399, were corrected in the Senate bill, the senator said.
Her bill proposes the creation of a reserve account of $1.75 million and $8.7 million more for operational costs.
Without these provisions, she said, “payment of…utility costs will prove to be a serious impediment to the ability of each [government] unit to function. The lack of non-personnel funding will also jeopardize the ability of CUC to maintain the levels of necessary revenue to pay for the [$6 million] Aggreko contract.”
The lowest in years
Pangelinan admitted that the identification of general fund resources for a fiscal year is “an estimate.”
“The possibility of less resources becoming available over the course of the fiscal year…is predicted by the secretary of Finance,” she said. “The general fund resources available…are the lowest they have been in years. The…committee believes that the FY 2009 appropriations must be made with care, attention to detail and, to the greatest extent possible, preserve provisions of the basic services of safety health and education.”
She added, “In time of declining revenues, failing infrastructure, rising costs and fundamental changes coming to our private sector, [the] committee believes that a detailed approach to appropriations…is necessary, making considered choices should estimated revenues decline as predicted. Our active participation is one of the fundamental justifications for the existence of the Legislature, maintaining the checks and balances so basic to a three-branch system of government.”
She concluded her report by stating that “the most fundamental job of the government…is to provide the basic services of health, safety and education to its people in the most cost-effective manner. The Legislature has no greater purpose than a considered and balanced budget that accomplishes this task. To this end, full and accurate reporting of all assets and liabilities is an essential part of the governor’s proposal. The long-term benefit of public trust outweighs any cost of time and resources expended to meet this obligation.”
Her report also mentioned the government units that did not provide the personnel information requested by her committee: the Criminal Justice Planning Agency, the Office of Vocational Rehabilitation, the Department of Community and Cultural Affairs and its divisions, the Department of Finance and its divisions, the Department of Labor and its divisions, the Department of Land and Natural Resources and its divisions, the mayor’s office and municipal councils on Rota, Tinian and Saipan, as well as all of the Rota and Tinian resident departments with the exception of the Tinian Health Center.
Info Box
The Senate substitute budget bill:
• Proposes the same figure submitted by the governor and approved by the House: $156.7 million
• Includes Austerity Fridays and Austerity Holidays
• Removes 409 FTEs that are vacant
• Corrected mathematical errors in governor’s budget submission
• Reduces the Office of Public Auditor’s fee from 1 to 0.75% while retaining OPA’s $2.5 million budget request
• Does not fund the NMC Apprenticeship Program
• Mandates a single government-wide employer contribution rate to the Retirement Fund — 37.9%
• Creates a $1.75 million reserve account that may be used for CUC
• Requires quarterly reporting of operations of the executive branch
• Requires legislative approval for hiring above approved FTE level
• Makes accommodations for the possibility that Immigration personnel who will be displaced by the federalization law may need to seek employment outside the government
• Does not fund the governor’s request for $54,000 for a budget and management special assistant
