CNMI OPPOSITION WANTS FURTHER BUDGET CUTS

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Opposes reducing work hours to deal with budget crisis

By Haidee V. Eugenio SAIPAN, CNMI (Saipan Tribune, March 24, 2010) - House Minority Leader Diego T. Benavente (R-Saipan) called on Gov. Benigno R. Fitial yesterday to further reduce the budget allocation for the remainder of Fiscal Year 2010, from 7.25 percent to 12.5 percent, instead of cutting government work hours from 80 to 70 per pay period to address the budget crisis.

But the Fitial administration is keen on reducing work hours by one hour every day as proposed in a pending measure.

"The government has been experiencing serious cash flow reduction that is posing the threat of payless paydays. Because of this impediment, reducing work hours is the most efficient approach at this time," press secretary Angel A. Demapan said when asked for comment on Benavente’s recommendation.

At the same time, House Ways and Means Committee chair Ramon Basa (Cov-Saipan) hopes to have enough votes to pass his austerity bill during Thursday afternoon’s session.

"It’s unfortunate that one of our colleagues, who would have voted yes, Rep. Frederick Deleon Guerrero, won’t be able to make it into the next session. We need a simple majority if there will only be 19 members present, so we hope to have at least 10 votes," he said yesterday.

The Covenant Party has seven members at the 20-member House, but the four independents have aligned themselves with the ruling party, making them the majority bloc. There are nine Republicans at the House.

Benavente also said any proposal to cut government employees’ salaries will affect not only the buying power of the employees but will also reduce government collections from taxes and fees.

"The 7.25 percent is not enough... Further reducing budget authority will also be consistent with what the judiciary and other agencies are asking for instead of affecting employees’ salaries. Cut further the budget allocation, and let each agency decide where to cut costs. I see that as a better resolution," Benavente told Saipan Tribune.

Benavente, a former lieutenant governor, said once the governor further revises the budget authority, he can also reprogram funds from non-critical agencies to critical areas like public health and safety.

Demapan said reducing work hours equates to reducing payroll disbursements on top of realizing savings in areas such as electricity, water and fuel.

"The bottom line is that the decline in revenues continues to threaten cash availability," he added.

Fitial ordered on March 9 an immediate across-the-board 7.25 percent cut in the current budget of CNMI government agencies and offices, with the revision of projected revenues for FY 2010 to just US$137 million.

The original estimated resource for FY 2010 was US$150.500 million, with US$148,083,551 for government operations.

Due to a projected decline in revenue, Fitial adjusted this amount to US$137,350,000, representing a 7.25 percent reduction that he said "must be absorbed by the budget authority remaining for the fiscal year."

Acting Finance Secretary Robert Schrack, in a March 2 memo to then acting Gov. Eloy S. Inos, reported a projected shortfall of US$13.15 million in FY 2010.

Benavente said "majority of the minority [bloc] is opposed to the austerity bill" introduced by Basa.

But he said each minority member is not forced to vote based on party affiliation.

"We have decided to make it a non-partisan voting. Each member is free to vote based on his understanding of the proposal and its effects. .We are all aware of the financial crisis," he said.

Basa, for his part, said he has also been lobbying Republican members of the House "to put politics aside and look at the merits of the bill."

"I hope we have the number," he said.

Rep. Stanley Torres, one of the independent House members, said he will vote "yes" on the austerity bill when it comes up for voting in the next session.

He said implementing an across-the-board pay cut is better than applying it only to some.

"I am pretty sure the bill will have 12 or 13 votes," he said.

Other House members are still undecided about voting on the bill, including former Ways and Means Committee chairman Ray N. Yumul (R-Saipan).

"[There are] still a lot of unanswered questions pending," Yumul said.

The governor earlier urged lawmakers to pass Basa’s original austerity bill, which would have cut government work hours to 72.

However, the House voted to kill the committee report recommending passage of House Bill 17-22 after some 30 parents, teachers, and other education officials from Saipan, Tinian and Rota urged lawmakers not to pass it.

Basa introduced another austerity bill, House Bill 17-45, which is expected to be taken up during Thursday’s session. This second bill will cut government work hours by 10 each pay period, more than his original proposal of eight hours per pay period. But his latest bill spreads out the work hour cuts every day, from 7:30 a.m. to 8:30 a.m., compared to the original measure of shutting down government agencies every other Friday.

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