House adopts Senate version of budget resolution

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BEFORE adopting it, the House of Representatives on Tuesday discussed in great detail House Concurrent Resolution 21-2, Senate Substitute 1 pertaining to the CNMI Fiscal Year 2021 budget.

This resolution aims to “approve revenue and resources of the CNMI as identified pursuant to Article III, Section 9(a) of the Constitution, and as amended, and 1 CMC, Division 7, for Fiscal Year 2021, beginning October 1, 2020, and ending on September 30, 2021.”

Its original version was introduced by House Committee on Ways and Means Chairman Ivan Blanco in late July of this year and was adopted, with amendments,  by the Senate on Friday.

During the House session, there was much discussion over whether or not the concurrent resolution as amended passes the constitutional test, specifically, whether or not the governor has identified revenue expenditures for FY 2021, and whether or not the Senate can suspend earmarks.

Each fiscal year, the governor is required by the Constitution to present a balanced budget proposal that describes the anticipated revenues and recommended expenditures, of which both amounts should be the same.

The Constitution reads, “The governor shall submit to the legislature a proposed annual balanced budget for the following fiscal year. The proposed balanced budget shall describe the anticipated revenues of the Commonwealth and recommended expenditures of Commonwealth funds.”

Both the original resolution and the Senate draft have the total identified budgetary resources for FY 2021 as $144,415,554, an amount that cannot be changed.

Blanco said the original concurrent resolution identified available resources at $87 million, while the Senate substitute identifies available resources at $96.4 million.

Rep. Sheila Babauta said passing the concurrent resolution meant that the House was agreeing to suspend the earmarks.

These earmarks are the 7% excise tax to solid waste amounting to $1.9 million; the Group Health Life Insurance, approximately $6 million; Customs, Immigration, Quarantine reimbursement for airport overtime, $260,000; Marianas Visitors Authority hotel occupancy tax, $4.7 million;  Micronesian Public Land Trust interest, $818,000.

 The House of Representatives adjourns following a lengthy session on Tuesday. Photo by K-Andrea Evarose S. Limol

Amounting to approximately $13.8 million, these earmarks would be freely allocated by law for programs and agencies,  Babauta said.

She added that under the Constitution, at least 25% of the government’s general revenues will go to the Public School System.

“By suspending these earmarks, we are agreeing to free up these funds and allocate as we agree on the budget bill…. Of course, I have concerns about the agencies that depend on these funds — the programs, the projects, and most especially, the personnel, the people who are funded under these earmarks…. However, [I’m] also realistic about the budget bill and that we have seven days to pass a balanced budget,” she added as she expressed support for the concurrent resolution.

“I would like for us to adopt it and work with the Senate on balancing a budget and ensuring that these programs — that people are adequately funded and that we don’t have a major impact [on] the agencies that depend on these earmarks,” Babauta said.

With a week to pass a new budget, she urged members to support the concurrent resolution and avoid a partial government shutdown.

But Rep. Janet Maratita, who is not seeking reelection, said she could not support such a concurrent resolution, which, she added, is based on “hearsay.”

She said there was no appendix attached to the resolution that clearly justifies how the amounts were derived.

“None of us here wants a government shutdown, but we must do our work diligently and do it right…. If there’s going to be a shutdown, so be it…. We cannot say that we have to pass this just to avoid shutdown,” she added.

House Committee on Education Chairman Roman Benavente expressed his support for the concurrent resolution and urged his colleagues to meet with the senators to check the figures and obtain clarification as to how they were derived.

Rep. Tina Sablan, for her part, said the solid waste tax arose under a federal stipulated order that required a guaranteed source of funding to manage the CNMI solid waste project and remain in compliance with Environmental Protection Agency regulations.

“Suspending that assurance removes that guarantee — removes that assurance,” she said.

As for the suspension of the earmark that will transfer interest income to MPLT, she said the CNMI government just borrowed $15 million from MPLT for disaster-related expenditures.

“There is a contractual obligation on the part the government to cover that no matter what, and we should make absolutely certain [that] whatever the outcome is in this budget process that that obligation is met,” she said.

She also raised concerns about suspending health and life insurance for government employees.

“Do we really want to mess with that? That’s almost half of the total amount that would be suspended under the Senate amendments to the concurrent resolution,” she said.

As for  MVA’s earmarks,  Sablan said she agreed with Rep. Joseph Leepan  T. Guerrero who had stated that the agency is already on such a tight budget and is owed millions from the general fund for FY 2019 and FY 2020.

“I’m honestly torn, colleagues. I recognize the value of arguments on both sides. The fact that we should even find ourselves a week before the end of a fiscal year facing a government shutdown, not even close to passing a budget is just frankly appalling, and it comes at a time when the absolute last thing that our people need is a government shutdown and more instability,” she said.

She agreed with Rep. Janet Maratita and said that lawmakers should follow the Constitution .

Vice Speaker Lorenzo Deleon Guerrero said whether or not the body adopts or rejects the concurrent resolution, they can still dispute the actual budget bill, which remains pending in the Senate.

This concurrent resolution does not suspend any earmarks, but only identifies the amounts available for appropriation, he added.

It was later clarified that the earmarked funds do not go into the general fund and are not available for appropriation, but if the governor concurs with the suspension of earmarks, then the funds could be appropriated.

By a vote of 19-1, HCR 21-2, SS1 was adopted by the House. Rep. Janet Maratita cast the lone “no” vote.

November 2020 pssnewsletter

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