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By Edith G. Alejandro

SAIPAN, CNMI (Saipan Tribune, Apr. 2) – Gov. Juan N. Babauta submitted to the House of Representatives yesterday a $226.34-million spending plan for fiscal year 2005 that seeks to allot more funding to three essential public services-education, health and public safety.

In his transmittal letter, Babauta also recommended to legislative leaders to zero-fund over 250 full-time employee positions that remain unfilled to allow the government to tap the funds allotted to these FTEs, estimated at over $10 million.

"We propose that some of over 250 FTEs, currently funded but unfilled, be zero funded. While this will not increase total available revenues, it will permit the use of these be redistributed within the budget," the governor explained.

Babauta said these FTE funds are being reprogrammed on an as-needed basis to make up for the inconsistencies between the FY2003 continuing resolution budget and the fiscal realities of FY 2004.

The governor also offered within-grade increases for most government employees, saying the salaries of all government employees, including those in the Public School System, be increased to the level where they would be now had there been no freeze. The long withheld salary adjustments will cost an estimated $7 million, which would be covered by zero-funding the currently unfilled positions.

The Babauta administration also proposed that the funding level for the Public School System be increased by14 percent from the FY 2003 level of $37 million to $42 million-an increase of $2.8 million.

The additional funds would be used to continue the Governor's Education Initiative that would provide computers in classrooms and assist the Northern Marianas College in meeting the costs of developing its New San Roque campus, estimated to cost $300,000.

Babauta also urged the Legislature to submit a realistic funding level for the three essential services: health, public safety, and education.

Yesterday was the statutory deadline for the first submission of the budget proposal. Another deadline is up in June, when the governor has to submit a finalized version of the proposed budget.

The governor's budget proposal-submitted to Senate President Joaquin Adriano and House Speaker Benigno Fitial-amounts to $226,342,095, an increase of $12.7 million over the current continuing resolution level of $213 million.

Babauta commended the House's passage of the FY 2003 budget allocation but urged the 14th CNMI Legislature to adopt an FY 2004 budget to be consistent with the Constitutional framework.

According to the governor, the Department of Finance has projected $209,787,288, to be available as General Fund resources for 2005. The projected revenue is $4,368,052 less than the revenues that were available to the General Fund from actual collections in FY2003.

"The reason for this projected decrease in available resources is the increase in debt service-a $60 million capital improvement bond-that begins in FY2005. This was previously an interest payment but will now be a payment on both interest and principal," Babauta said.

The governor explained that because of the debt service, there would be a $1.305-million decrease in the General Fund. The debt service for the land compensation bond which would also begin in FY2005.

Babauta said that to make up for the revenue shortfall and to provide sufficient funding for the three chronically underfunded areas-the Department of Public Health, Department of Public Safety and utilities, the administration proposed that the Legislature enact comprehensive legislation that will both cut the cost of government and raise additional revenues.

Babauta also stressed that the Integrated Fiscal Plan, which was junked by the 13th CNMI Legislature, continues to merit serious consideration since it would not only increase revenues but would also cut the costs. The IFP is seen also to be equitable since it calls for short-term sacrifice from the government employees in return for long-term job security. Babauta added that the plan calls for contribution from all sectors of the economy in order to provide the level of public service the community demands.

"The administration has always been open to and continues to welcome the opportunity to discuss alternatives with the Legislature. We offer the IFP because it meets the goal of responsibility and equitability, and produces additional resources of $13,690,184 for FY 2005," Babauta explained.

Babauta stressed that the administration believes strongly in the importance of enacting a budget for each and every fiscal year, adding that it is not too late to act on the FY 2004 budget.

He assured the CNMI Legislature that the administration is committed to dialogue and mutual understanding as he urged the two Houses' leadership to work together with the administration in fulfilling the responsibility to manage the public funds prudently.

April 2, 2004

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