THE Senate on Friday unanimously passed its version of the Fiscal Year 2023 budget bill in the form of House Bill 22-116, House Draft 2, Senate Substitute 1. The bill now returns to the House of Representatives.
FY 2023 starts on Oct. 1, 2022. Without a new balanced budget enacted on or before that date, there will be a partial government shutdown.
Senate President Jude U. Hofschneider presided over the session at the Tinian courthouse. Sen. Paul A. Manglona was absent and excused while Sens. Edith Deleon Guerrero and Teresita A. Santos appeared virtually from the Senate chamber on Saipan.
In his remarks during the session, Senate Committee on Fiscal Affairs Chair Victor B. Hocog noted that the House version of the budget bill relied heavily on the American Rescue Plan Act funds to pay CNMI government employees. He said these federal funds are temporary and will not cover the employees’ pay in the long run.
He said the House version proposes that 80% of the government employees’ pay would be funded by ARPA while the remaining 20% would be funded by local monies.
“That uncertainty really places all government employees in jeopardy the following fiscal year, so your committee decided to return the House version,” Hocog said.
The Senate substitute bill proposes the reverse: funding 80% of government employees’ pay through local funds, and the remaining 20% through ARPA funds.
“That is one of the major changes that the Senate reinstated because it would like to ensure that all government employees that are being paid today, under this fiscal year, will have a continuity of [employment] come 2024,” Hocog said.
“I’m not quite sure…how long ARPA can be sustained to subsidize our local workforce…. If and when ARPA runs out, then we are telling all government employees that they have no guaranteed work in 2024. That was the major concern of your committee in restoring the original version…in conformance with the governor’s submission for the utilization of local funds for personnel.”
In addition, Hocog said the House version would have affected government employment on Rota, Saipan, and Tinian, with budget cuts that would decrease existing government jobs.
But he said the House did not identify which positions would be cut, and whether the affected employees are contract or civil service employees.
Hocog reiterated that the Senate substitute bill would ensure government workers’ continued employment “without having to endure uncertainty with the economic welfare of their families.”
He added that the House version did not take into consideration the governor’s guaranteeing payments for retirees’ 25% benefit through the first quarter of the new fiscal year.
For his part, Sen. Karl King-Nabors said he was “shocked” to see budget cuts for Rota and Tinian, noting that neither of the two islands has a private sector comparable to Saipan.
He added that the cost of living is also higher on Tinian and Rota, compared to Saipan.
“On Tinian and Rota, we don’t have that private sector to absorb the amount of people being cut. This impact is almost on everybody,” he said.
“How far does the dollar go on Tinian, and how far does the dollar go on Rota?… I would just like to bring that to everybody’s attention,” he added.
According to Hocog, “What the Senate is trying to achieve here is not to provide a perfect budget for fiscal year 2023, but to at least instill a common-sense budget for 2023 that will be workable, attainable, and affordable for people to continue their employment.”
Hocog is hoping that the House will take a close look at the Senate substitute bill, realize the validity of the amendments, “and refrain from being too antagonistic and vindictive [toward the] administration….”
He added, “This is the time when both the Senate and the House of Representatives will have to come together in the best interest of delivering this budget…to ensure that our people are given and provided with the necessary tools for their continued livelihood…as we continue to struggle and bring in more revenue.”
Victor Hocog
