House rejects Senate version of FY 2021 budget; partial government shutdown looms

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BY a vote of 18 to 2, the House of Representatives rejected the Senate version of the Fiscal Year 2021 budget  during an emergency session on Sunday.

Rep. Antonio Borja of Tinian voted in favor of the amendments, while Rep. Donald Manglona of Rota also voted in favor, but “with reservations.”

With two days left in the fiscal year, conferees from  the Senate and the House will now need to meet to draft a version acceptable to both chambers.

The governor submitted his budget proposal in April, and a revised version in July.

Under the CNMI Constitution, without a new and balanced budget before Oct. 1, 2020, there will be a partial government shutdown.

The first and, so far, only time the CNMI government had to partially shut down was in 2010. The partial shutdown lasted eight days and affected about 1,400 government employees.

On Sunday Speaker Blas Jonathan Attao  appointed three conferees from the House to meet with their Senate counterparts: House Ways and Means Chairman Ivan Blanco, House Floor Leader John Paul Sablan, and Rep. Joseph Leepan T. Guerrero with Rep. Joel Camacho as an alternate member.

The House is now waiting for Senate President Victor Hocog to  appoint the Senate conferees.

In an interview, Rep. Blanco said in case of a partial government shutdown, essential agencies will remain open. These include the Department of Public Safety, the Department of Fire and Emergency Medical Services, the Department of Corrections, the Commonwealth Healthcare Corp. and other autonomous agencies.

The House of Representatives convenes on Sunday for an emergency session  to discuss the Senate version of the Fiscal Year 2020 budget. Photo by K-Andrea Evarose S. Limol

"When we looked at what the House budget provided and compared it to the proposed Senate version being considered by their Fiscal Affairs Committee, we expected to see some changes in their Senate draft,” Blanco said in a statement. “We understand that Rota and Tinian have municipalities to run and the House honestly did its best to adequately fund them, but the numbers we saw in their proposed draft were unreasonable.”

He added, “In the proposed Senate version, there was a significant increase of $3.1 million for Tinian and Rota, $1.8 million and $1.3 million, respectively.  Saipan was increased, too — but instead of a similar significant increase, the Third Senatorial District received an increase of $247,000.”

When you compare what the House passed to what the Senate is considering, Blanco said, that is a ratio of 12 to 1 in terms of what the First and Second Districts were allotted compared to the Third Senatorial District.

“Based on this information, we do not feel confident that we can approve the Senate version of the budget if this issue remains unresolved.” 

Regarding the House version of the budget that it passed on Aug. 5 and transmitted to the Senate for action, Blanco said, “Our House version took the $82 million that the governor identified as the net total available for appropriation and we stayed within that figure.  That’s a balanced budget.” 

He said the House “made some tough decisions and we wish we could have given more in certain areas, but in the end, our balanced budget accounted for the government’s operations and its debts.  We did this while respecting about $13 million in earmarks that the governor set aside for Group Health Life Insurance, Solid Waste, [the Marianas Visitors Authority], and [the Marianas Public Land Trust]. These earmarks were not included in the governor’s proposed figure of $82,656,213 for our net expenditure budget for FY 2021.”

By identifying $82 million, the governor set the cap for all intents and purposes, Blanco said.

Moreover, he said that by removing these earmarks in their Senate version of the annual budget, the Senate reduced the $13 million by 25%, which means that there will be $3.25 million less to pay for these legitimate obligations.

“By appropriating the entire $144 million gross amount that was provided by the governor that includes the earmarks, the Senate appears to be exceeding the working cap and underfunding the original earmarks,”  Blanco said.

“We feel bad that the possibility of a government shutdown exists, if we do not see eye to eye on the Senate version, but we cannot pass an unbalanced budget or use funds we really do not have.”

To the people of the Commonwealth, Blanco said: “Please trust that we will work hard and burn the midnight oil if need be, to have a budget that satisfies both houses on the governor’s desk for his consideration as soon as possible. We may not agree with the current budget proposal,  but we will work together to avert a shutdown.”

He said there are more commonalities than differences between the House and the Senate versions of the proposed FY 2021 budget.

Also present for the House emergency session on Sunday was legislative budget analyst Dave Demapan who explained the Senate amendments and answered questions that members of the House had regarding the proposed FY 2021 budget.

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