Everyone in the gallery cheered when the administration agreed to support the revenue generating measure, House Bill 17-53.
But after a recess, Inos and the House leadership said they could only support a business license fee hike but not the increase in the excise tax and the reduction in the rebate rate that the Senate and the House minority bloc recommended.
With still no new budget in place, the government shutdown that started on Friday will continue today.
Lawmakers wanted to pass H.B. 17-53 and transmit it to Gov. Benigno R. Fitial immediately so he could sign it into law.
Lawmakers would then act on the budget bill.
But a disagreement arose regarding the excise tax hike and rebate cut pushed by the Senate and House minority bloc.
The administration and the House leadership said they didn’t want to further hurt businesses by increasing taxes.
The meeting, which started cordially, ended after heated arguments and emotional speeches.
Inos said the government’s shortfall now exceeded $11.5 million.
In an interview, he said the governor asked him to sit down with the lawmakers until they resolve the budget issue “because people out there are hurting.”
According to Inos, “I think we are making progress. We will meet again [today] and hopefully finalize and resolve all the remaining issues.”
Senate President Paul A. Manglona, Ind.-Rota, said they thought they could pass H.B. 17-53.
House Minority Leader Diego T. Benavente, R-Saipan, said once the governor signed it into law, Fitial would increase the administration’s revenue projection from $132 million to $141 million which the Legislature would adopt.
Manglona expressed frustration that they still couldn’t pass the budget bill.
“We’re willing to stay here all night just to pass the budget and bring people back to work tomorrow,” he said.
Some 1,400 government employees are affected by the shutdown.
Inos said because of its new obligations, the government is facing another $12.5 million shortfall, on top of $11.5 million, even if the working hours are cut to 16 and no holidays are paid.
The new obligations include the additional 10 percent the government has to pay the Retirement Fund’s defined benefit plan which will cost $4.6 million; the renewal rate for the government health insurance, $4.1 million; and the additional Medicaid share, $3.8 million.
Inos said these obligations actually require a 24-hour cut.
An eight-hour cut will now result in the loss of 696 government jobs instead of the 383 earlier projected, he added.
The Senate and the House minority said the new projected shortfall should be temporarily “set aside,” as they asked the House leadership and Inos to try to address the initial $11.5 million shortfall first.
