Vice President and Finance Minister Kerai Mariur in an interview said the country is facing the challenges of not only a local revenue shortfall of almost $5 million but the next’s year’s budget will also be affected by the termination of the financial provision of the Compact of Free of Association.
By Oct. this year, the Compact financial provision will expire. Under the provision, Palau is receiving at least $14 million from grants and subsidies and $5 million from the Compact Trust Fund.Although Palau is allowed to withdraw $15 million from the Compact Trust Fund by Oct. 2009, there is still a shortfall of $4 million the country used to get under the Compact.House Committee on Ways and Means Chairman Del. Jonathan Isechal said that under the law the FY20010 budget should have been submitted by April 15.Isechal said the Executive Branch has yet to submit the budget.Mariur however said that Executive Branch will submit the FY2010 budget by July Congress regular session.“It is a tough time due to the challenges but we are working on the budget,” Mariur said.Mariur added that the Executive Branch is also considering asking Congress to pass a supplemental budget because of the shortfall in the FY2009 budget.He said however, the executive branch will be waiting two months prior to the end of the 2009 budget before deciding to work on a supplemental budget.He said as it is , the country is facing a budget deficit of $6 million for FY 2009 budget and needs to pinpoint source of funding for the supplemental budget.“The picture today is that we need a supplemental budget, until we find a funding source then we are looking into a supplemental budget,” Mariur.Mariur said the president’s reprogramming authority maybe utilized to identify sources of funding.
