Finance Minister Jack Ading introduced the fiscal year 2012 budget to the Nitijela or parliament at the end of last week, and Appropriations Committee Chairman Sen. Michael Kabua launched public hearings on the plan Wednesday. It calls for spending $131,162,120, a nearly identical amount to the FY 2011 budget, which was approved at $130.9 million.
The funding is provided as part of a long-term aid package with Washington that expires in 2023.
The biggest portions of the FY 2012 budget will go to the Ministry of Education — $22,222,487 or 17 percent of the total — and the Ministry of Health — $21,474,392 or 16 percent.
Capital improvement funding for elementary and high schools adds an additional $7,390,281 for the education sector, the College of the Marshall Islands will receive $7,524,667, and $695,148 will go to the scholarship program bringing the percentage of the budget devoted to education to 29 percent.
For both the Ministries of Education and Health, a large part of their budgets come from the U.S. government. Dependence on U.S. funding is particularly extreme for the Ministry of Education, which is receiving $20,038,137 — 90 percent — of its total from U.S. sources.
The Ministry of Health has more locally generated funding than Education. But its budget is still 58 percent dependent on funding from the United States.
The U.S. is providing $88.6 million of the total revenue for the Marshall Islands through the Compact of Free Association treaty and federal grants.
This accounts for 68 percent of all revenue in the new budget, which begins October 1. The second major aid donor to the Marshall Islands is Taiwan, which is providing $10 million. The country’s ship registry, the world’s third largest in tonnage, will contribute $4 million to the country’s treasury in 2012.
