In the nick of time

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IN a race against the clock, the House of Representatives, the Senate, and the Torres-Palacios administration succeeded in enacting the fiscal year 2021 budget law early Thursday morning.

The bicameral conference committee concluded deliberations late Wednesday evening, just hours before the first day of the new fiscal year.

Without a new, balanced budget, there would have been a partial government shutdown starting on Thursday, Oct. 1, 2020. The governor submitted his budget proposal to the Legislature in April, and a revised version in July.

At past 10 p.m. Wednesday, by a vote of 5 to 1, House Bill 21-124, Senate Draft 2 in the form of Conference Committee Substitute 1 was passed by the bicameral conference committee.

Rep. Joseph Leepan T. Guerrero opposed the conference committee substitute version and walked out of the Senate chamber following the vote.

He later explained that he disagreed with the provision that would require the executive branch to pay for the utilities of Rota and Tinian when the CNMI could not pay the utility costs of its only hospital.

The provision was among the items vetoed by the governor when he signed the budget bill.

Senate President Victor Hocog and Speaker Blas Jonathan Attao called for emergency sessions  following the committee vote on the budget bill.

The Senate passed the measure around 1 a.m. while members of the House were still deliberating in their chamber.

A number of concerns were raised by Reps. Edwin Propst and Tina Sablan. They were the only members who voted against the budget bill.

Sablan opposed granting the governor full reprogramming authority within the executive branch.


The bicameral conference committee co-chairs, Senate Vice President Jude Hoschneider and Rep. Ivan Blanco, confer during a meeting late Wednesday evening in the Senate chamber. Photo by K-Andrea  Evarose  S. Limol

She said an earlier version of the bill stated that the governor's unlimited reprogramming power would not extend to the Legislature, the judiciary, or independent/autonomous agencies.

She said that language was deleted by the conference committee.

But the House conferees said the bill would grant the governor unlimited reprogramming authority only within the executive branch.

They said they do not intend to authorize the governor to reprogram funds from the Legislature, the judiciary, and independent/autonomous agencies and programs.

Sablan said the governor already has 25% reprogramming power as provided by the Planning and Budgeting Act, which, she added. allows him to reprogram over $6 million without requiring legislative approval.

She said she could not stomach the provision that would give up the legislature's power of the purse and essentially hand the governor a blank check for the new fiscal year.

"Not when we know that there has been widespread and documented abuse of public funds in this administration — illegal first-class travel, lavish expenditures, illegal overtime and double pay, questionable sole-sourced contracts, runaway spending and four straight years of deficits," she said.

She added that "finding the money" is the job of the Legislature, not of the executive branch.

"In this incredibly challenging fiscal crisis, what we need from the Legislature is more control over the public purse…more oversight…more reining in of government spending that has been out of control to the great detriment of public services and operations," she said.

By a vote of 18 to 2, the budget bill was passed by the House and transmitted to the governor for review around 2 a.m. Thursday.

At the administration building, Gov. Ralph DLG Torres, Lt. Gov. Arnold I. Palacios, and their team of advisors, fiscal and budget analysts, as well as legal counsels, including Attorney General Edward Manibusan and Deputy AG Lillian A. Tenorio, reviewed the budget bill.

Press Secretary Kevin Bautista, in an interview, said the Torres-Palacios administration was doing its due diligence to ensure that the government has the appropriate amount of budgetary resources needed to run essential public services, such as public safety, public health, public education, as well as ensuring that there is adequate staffing and funding for all three branches of the CNMI government.

Essential public services, he said, also include ensuring that retirees receive their full pensions, and that group health and life insurance is provided for government employees.

In signing the bill, the governor vetoed several items, including a provision that would have required him to notify the Legislature before exercising his reprogramming authority.

This provision would have also required him to provide a detailed breakdown of the reprogramming of funds.

The governor, however, is still required to provide a reprogramming report within 30 days after the end of each quarter.

He is also required to provide a summary of all reprogramming activities within 60 days of the end of the fiscal year.

The administration had a contingency plan in place in case there was no new budget law before 7:30 a.m. Thursday when government offices open for business.

Bautista said an executive order had already been drafted that would clarify who the essential employees are within all departments and agencies that would resume working, and who would have to stay home.

Rep. Ivan Blanco and Senate President Jude Hofschneider, co-chairs of the bicameral conference committee, thanked the committee members and their team of legal counsels and staffers for their due diligence during the committee deliberations.

"It wasn't easy working with different numbers, long days, and long nights. We finally came to an agreement at the 11th hour. I'm happy that we're able to get a product out to the House and the Senate," Blanco said.

The FY 2021 budget bill is now Public Law 21-35.

It appropriates $101,032,217 based on revenue projections of the government from October 1, 2020 through September 30, 2021.

The amount includes $4.5 million for the Department of Public Lands.

The total identified budgetary resources for FY 2021 is $144.4 million, which includes $47.9 million for bond and debt payments. Of that amount, $41 million is for the settlement agreement for government retirees.

In FY 2020, long before the Covid-19 pandemic that has shut down the tourism industry, the original government budget law identified $152 million in available resources for appropriation, including $4.1 million for DPL. The total identified budgetary resources was $233.2 million, which included bond and debt payments and $43 million for the settlement agreement.

"Having received the budget bill from the Legislature at 2:08 a.m. on October 1, 2020, I did not have sufficient time to review and make any comments necessary to avoid a government shutdown," said the governor in a letter to Speaker Attao and Senate President Hocog on Thursday.

"While I am approving the legislation, I am compelled to address several sections, which are problematic in their implementation or in their unfairness to other activities of different branches."

The governor said that he will transmit a comprehensive review, comments, and explanations for his actions on the bill in the next couple of days, including his reasoning for line-item vetoing certain provisions.

November 2020 pssnewsletter

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