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Spending plan spells out 10 percent pay cut

SAIPAN, CNMI (Marianas Variety, Dec. 5, 2008) – The House of Representatives unanimously adopted yesterday the joint conference committee report endorsing a US$156.7 million budget for the Commonwealth of the Northern Mariana Islands (CNMI) government this fiscal year 2009 with provisions cutting by 10 percent the salaries of government employees.

The twice revised House-Senate Joint Committee Report on House Bill 16-169, or the Appropriations and Budget Authority Act of 2009, was adopted by a voice vote.

Saipan Republican Reps. Rosemond B. Santos and Vice Speaker Joseph P. Deleon Guerrero were not present during the session.

House Floor Leader Joseph N. Camacho, R-Saipan, said if the Senate adopts the joint committee report, the budget bill will be transmitted to Gov. Benigno R. Fitial for his consideration.

Rep. Victor B. Hocog, Ind.-Rota and acting chairman of the House Committee on Ways and Means, was the principal sponsor of the budget bill which was amended nine times in the House and once in the Senate.

Speaker Arnold I. Palacios, R-Saipan, and Senate President Pete P. Reyes, R-Saipan, subsequently convened a joint conference committee to draft a compromise version of the bill.

Hocog led the House conferees while Sen. Maria Frica T. Pangelinan, D-Saipan, led the Senate’s.

According to the House, the committee’s first budget proposal had a $9 million shortfall.

The new version now reflects a 10.723 percent across-the-board cut for all branches of the government with provisions for more accountability and control of public funds.

Both houses of the Legislature agreed to drop provisions mandating the re-imposition of the austerity and unpaid holidays, but they will allow the Department of Finance to cut by a tenth the employees’ wages, except those protected by the CNMI Constitution — lawmakers, the governor, the lt. governor, justices and judges.

The original personnel expenses for FY 2009 were set at $120.2 million. The first committee report reduced this to $118.3 million for 4,017 full-time-employees or FTEs.

The adopted version further reduced this amount to $112.2 million.

"The total amount of personnel funds appropriated is changed from $120,237,812 to $112,213,302," states the report.

Fitial’s full reprogramming authority was also eliminated.

Lawmakers said there are "no funds available" to be reprogrammed anyways.

The maximum salary of $54,000 annually or higher for department heads with a Ph.D. or law degree is reduced to $45,000.

"Notwithstanding any law or regulation to the contrary, all government salaries are hereby frozen as of the first pay period following the effective date of this Act. There shall be no increase, either direct or indirect, in the compensation or the employment benefit of any official or employee of the commonwealth government, including all boards, commissions, independent agencies, public corporations, authorities, municipalities, and all other government agencies and instrumentalities, under an existing contract or renewed contract, including renewal contracts of employees under § 604 (a)(2)," the bill stated.

"Annual compensation for resident department heads shall not be in excess of $45,000," it added.

During the deliberation, Camacho asked his colleagues to give him at least a week to come up with a companion bill for the proposed budget to eliminate the 10 percent wage cut.

"It’s the guys making $10,000 a year [that I am most concerned about]," he said. "Think about them — they live paycheck to paycheck."

Rep. Edward T. Salas, R-Saipan, said lawmakers have to cope with a difficult situation in these tough economic times.

"We have to face reality," he said.

Rep. Tina Sablan, Ind.-Saipan, said the FY 2009 budget bill is not perfect.

But, she added, "this budget may be the best that we can come up considering that we’re now on the 4th of December."

Rep. Heinz S. Hofschneider, R-Saipan, for his part, said the government should live within its means and that time is of the essence in enacting a spending limit.

The speaker thanked the lawmakers who worked on the budget.

"This was quite a tedious process," Palacios said. "Quite frankly, at one point, I didn’t think that we would have a budget. There were major sticking points with the salary reduction across-the-board."

He added, "I think we’ve done our job. I hope that the next round of budget talks would be approached differently."

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