“We can’t touch the salaries of civil service employees,” he said in an interview on Friday. “The budget we passed does not target personnel.”
Palacios, R-Saipan, said the heads of each department, agency or instrumentality will make the decisions on the cuts mandated by the budget bill, which is now on the governor’s desk.
“We’re all going to be challenged,” he added. “The Legislature, too, including the [Legislative Bureau] will have to cut — every lawmaker will be subjected to the same decision-making process that department heads have to face.”
The government, he added, must stop hiring non-essential personnel.
According to the speaker, the $156.7 million budget bill the House of Representatives and the Senate passed unanimously on Thursday “meets the constitutional mandate — it’s a balanced budget; the expenditure level meets the resource level.”
Essential agencies, he noted, will be exempted from the 10 percent cut: the Public School System, Northern Marianas College, the Departments of Public Health and Public Safety.
Citing the global financial crisis and its impact on the already dismal CNMI economy, Palacios said the government may not even collect $156 million in FY 2009, which started on Oct. 1, 2008 and ends on Sept. 30, 2009.
“We may have to revisit the budget to adjust it,” he added. “The likelihood of the budget amount going down further is a reality.”
He believes that the budget cuts should not affect the lawmakers’ jobs.
“Our predecessors and other former officials managed to serve the community with a smaller or no budget at all,” he said. “If you asked the people to give you the privilege to serve them, then you must be ready to serve them.”
Asked if he expects the governor to sign the budget bill, Palacios said, “If he rejects it, we will try to override the veto. But we hope he will seriously consider our proposal. If he has concerns I hope he will meet with me and the Senate president so we can address whatever concerns he may have. We did have several discussions with [the governor’s Finance secretary] during the drafting of the bill.”
Not having a budget, the speaker said, “means another continuing resolution, which means deficit spending and we don’t want to see that. This budget is the best plan we have under these circumstances. I don’t like to see cuts in public service but the reality is that we have only a certain amount of resources that we have to work with.”
Press Secretary Charles P. Reyes Jr. yesterday said the governor “will review the bill and consult with the secretary of Finance and other key advisors. He has 20 days to act on the bill.”
Under the CNMI Constitution, if there is no new budget passed, the government can operate under the spending ceilings set by the last enacted budget law.
Since 1998, the government enacted only three budget measures and is still operating under the budget passed in 2006.
