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Today is ‘Austerity Monday’

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TODAY, Oct. 5, marks the first “Austerity Monday” of the new fiscal year, a provision of the Fiscal Year 2021 Appropriations Act that was passed by the CNMI Legislature and signed into law by Gov. Ralph DLG Torres on Thursday.

The new budget, Public Law 21-35 designates Mondays as “austerity days” for the CNMI government —all its branches, departments, autonomous agencies, public corporations, political subdivisions, and instrumentalities that are implementing austerity days as necessary to operate within their respective budget allocations.

During the lengthy deliberations over the budget bill prior to its passage, lawmakers found that it would be more cost-efficient for the government for government employees to work on Fridays instead of Mondays because of the time difference between the CNMI and the U.S. mainland.

The federal government is closed on Sundays, which are Mondays in the CNMI.

Gov.  Ralph DLG Torres signs the Fiscal Year 2021 Appropriations Act into law early Thursday morning. 

Office of the Governor photo

However, if a legal Commonwealth holiday falls on a Monday, the administration said that the “austerity day” will be observed on the Tuesday of that week instead.

Austerity Monday does not apply to partial or full federally funded government employees.

It also does not apply to the Legislature, the municipal councils, and the Board of Education on Monday, January 11, 2021, so they can conduct their respective organizational meetings or inauguration following the 2020 midterm elections.

Budget

The appropriations act approves and identifies total budgetary resources amounting to $144.4 million for FY 2021.

Of this amount, $47.9 million is set aside for debt service, including $41 million for the settlement agreement with government retirees.

The  total local revenue and resources available for appropriation for CNMI government activities amount to $96.4 million.

The budget law requires the secretary of Finance to submit a report on actual revenue collected and revenues estimated, as well as actual expenditures and appropriated expenditures to the Legislature’s presiding officers, the chair of the Senate Committee on Fiscal Affairs and the chair of the House Committee on Ways and Means at the end of each quarter for all funds appropriated for government operations and activities.

The Finance secretary is also required to meet with the chairs of these committees in mid-February, mid-May, and mid-August to discuss actual revenues collected compared to the estimated revenues.

Furthermore, the secretary must submit a fund status report to the presiding officers of the Legislature regarding funds transferred in and out each quarter.

The secretary of Finance regulates and controls the expenditure of funds appropriated and allocated under the budget law, “so that no agency, department, instrumentality, program, or activity may expend the funds contrary to the law or fiscal management policies and practices of the Commonwealth.”

Gov. Torres has unlimited reprogramming authority within the executive branch, but, like the secretary of Finance, is required to submit reports to the presiding officers of the Legislature, the chair of the House Committee on Ways and Means, and the chair of the Senate Committee on Fiscal Affairs within 30 days after the end of each quarter of the fiscal year.

In his reports, the governor must include a description of each item reprogrammed, the reason for each reprogramming, the change in the approved budget caused by the reprogramming, the cumulative amount of all reprogramming during the fiscal year, and other information requested by the committee chairpersons.

He must likewise submit an annual summary of all reprogramming activity within 60 days after the end of the fiscal year.

Vetoes

In signing the appropriations act, the governor vetoed a number of provisions, including Section 601(b), which would have required the executive branch to pay for the utilities of Rota and Tinian.

He also vetoed certain hiring restrictions and provisions that would have exempted  the Public School System, Northern Marianas College, the Northern Marianas Technical Institute, the Commonwealth Ports Authority and the Commonwealth Utilities Corp. from the 1% Office of the Public Auditor’s Fee.

Torres also vetoed Section 700(b), which would have prohibited a government business unit’s maximum number of positions from exceeding the number of positions authorized in the act, unless authorized by a joint resolution of the Legislature.

Under Section 710(d), appropriated funds for the Group Health Insurance and GHLI retirees must not be reprogrammed for anything else.

Any lapsed funds have to be deposited into a non-lapsing account to be used to reduce the premium of the GHLI for active employees and retirees.

But the governor vetoed a provision that would have required the central government to first satisfy 25% of its past and current obligations for the death benefits of retirees.

He also vetoed the  provision that would have allocated $1.4 million in Commonwealth Worker Fee Funds for NMC ($800,000) and NMTI ($600,000).

Also vetoed was the $100,000 proposed for the Micronesian Legal Services.

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