FITIAL TO CUT CNMI GOVERNMENT SPENDING 15 PERCENT

admin's picture

By Moneth G. Deposa

SAIPAN, CNMI (Mariana Variety, Feb. 27) - Governor Benigno R. Fitial will formally inform the Legislature today of his plan to enforce an across-the-board budget reduction of 15.5 percent in light of the government’s declining revenue collections.

"Our finance secretary (Eloy Inos) is projecting very low revenue collections from now until the end of the fiscal year…we’re only expecting to collect US$163.5 million," Office of Management and Budget special assistant Antonio Muna said in an interview yesterday.

The government’s budget for fiscal year 2007 is US$193.5 million.

Senate President Joseph M. Mendiola, Covenant-Tinian, in a separate interview, said the US$15.5 million in savings from the austerity law the administration earlier mentioned is merely a "projection."

He said what is certain right now is that the government faces a US$30 million shortfall.

Muna said the governor will ask the Legislature "to effect a mandated proportional reduction across all branches accordingly."

"Everyone has to take the 15.5 percent cut as mandated in the Planning and Budget Act," he added.

Muna said whatever each department has spent since the first quarter on operations will be subtracted from the new reduced appropriation.

Because the Planning and Budgetary Act does not allow any exemptions, Muna said the governor has asked OMB to draft a new budget for FY 2007 to ensure that the cuts for "critical areas" - public health, public education, public safety and corrections - will be restored later.

"The Planning and Budget Act takes everybody down without discrimination…proportionally going across all branches and it’s going to adversely affect the essential services so what the governor intends to do is come back to the Legislature with an amended budget that will reflect the restoration of funding for those essential services," Muna said.

The governor, he added, will push for the passage of the amended budget in the next 30 days.

Muna said the governor has to ban travel and stop the hiring of new personnel due to the projected revenue shortfall.

"These are all to contain costs and do what needs to be done. We have been going in that direction since the beginning of the year and we are basically spending US$50 million less than the projected amount on an annual basis," he said.

Mendiola said the governor’s plan was relayed to leaders of the Legislature during an emergency meeting on Friday.

"He told us that collections are down. Projected revenues are no longer in line with the original projected revenue, so we have no choice -- the thing to do now is look for alternative sources of revenue for the CNMI," Mendiola said.

Rate this article: 
No votes yet

Add new comment