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‘DAY OF RECKONING’ AS CNMI WORKERS FOREGO PAY Checks delayed as government scrambles for funds

By Haidee V. Eugenio SAIPAN, CNMI (Saipan Tribune, June 18, 2010) - "The day of reckoning has arrived," acting Gov. Eloy S. Inos told over 30 Cabinet members and other officials yesterday afternoon, announcing that most paychecks in all branches of government will not be released in time for today’s payday due to insufficient funds.

Most government paychecks may be released on Tuesday or Wednesday.

Officials said this is the first time in CNMI history that government personnel experienced a delay in the release of their salaries.

Despite the swift enactment yesterday of a landmark law giving the governor the authority to reprogram up to US$10 million for the remainder of Fiscal Year 2010 for payrolls, the tedious process of identifying and transferring funds into the general fund will still delay the release of paychecks by a few days.

Inos said the money to be reprogrammed may come from independent agencies such as the Commonwealth Development Authority, the Department of Public Lands, and the Marianas Public Land Trust.

As of yesterday, the exact amount that will be reprogrammed has yet to be known.

Inos asked for the understanding and patience of all employees and officials as the government weathers the crisis.

"I’d like for you folks to go back to your departments and tell the employees about this. Tell them we tried our best but this is difficult," Inos told Cabinet members.

Inos called for an emergency Cabinet meeting at 1pm and, shortly after 1:30pm, received a call informing him that the Legislature had passed the bill authorizing him to reprogram up to US$10 million for the payment of salaries in FY 2010.

Bill 17-15, HD1, SS1, introduced by Rep. Ray N. Yumul (R-Saipan) and six other House members, is now Public Law 17-6.

Juan Camacho, 46, a community worker, said a few days’ delay in salary is a lot better than losing his job.

"We knew this [was] going to happen, we were expecting this, and now it has happened.but only [for] a few days," the Kagman resident said. Camacho is a father of three.

Inos said the government needs over US$3 million each payday to pay for salaries.

For today’s payroll, the government was only able to collect some US$1.5 million, just enough to cover for the wages of close to 1,000 government personnel in "critical" positions.

"I’m sorry but we all share the pain. We should be more concerned about our employees," Inos told Cabinet members.

Inos said the central government does not expect "fresh cash" to come at least until the end of July when businesses pay their gross revenue tax to the government.

He urged Cabinet members to limit their operational expenses and avoid unnecessary spending.

Exempted from the delayed wages are close to 1,000 police officers, corrections officers, firefighters, doctors, nurses and other critical positions directly involved in public safety and patient care.

Also exempted are government employees whose positions are funded by the federal government.

The Public School System also won’t be affected by the payroll delay, Inos said.

Inos said the rest of the CNMI government’s employees and officials-a little over 3,000 and include Inos himself, lawmakers, judges and justices-are expected to get their salaries on Tuesday or Wednesday next week.

Rep. Joseph Palacios (R-Saipan) said he is more concerned about the impact of the delayed wages on the lowest-paid government employees or those earning less than US$12,000 a year.

"They would be more upset about it. Hopefully, this issue would be resolved soon so that this won’t be repeated," Palacios said in an interview while waiting for the acting governor to sign the reprogramming bill in the governor’s conference room on Capital Hill.

Rep. Ramon Basa (Cov-Saipan) said the delayed salary speaks of the severity of the government’s financial problem.

The Fitial administration had repeatedly called on the Legislature to pass austerity bills to prevent payless paydays.

Basa, chairman of the House Ways and Means Committee and author of one such austerity bill, said had his bill seeking to cut work hours by 10 hours per pay period passed the Senate after passing the House, the government may have been able to prevent a payless payday.

"If we had voted for the passage of the bill, by this time, we would have accumulated enough cash to pay for this pay period and the next," he added.

Senate Vice President Jude U. Hofschneider (R-Tinian) said he would also ask for the patience and understanding of Tinian government employees and residents.

"This is not payless payday. It’s only delayed wages," he added.

Ignacio Demapan, resident executive for the Indigenous Affairs Office, said it is "unfortunate" that the release of government paychecks will be delayed but he said the administration and the Legislature came together to address the problem.

"I also ask for the public’s patience," he added.

Inos signed the emergency reprogramming bill at 3:21pm yesterday.

At least 13 lawmakers led by House Vice Speaker Felicidad Ogumoro (Cov-Saipan) and Hofschneider witnessed the signing in the governor’s conference room.

The Senate substitute version of the bill capped the amount that can be reprogrammed at US$10 million, and only for FY 2010.

Senate President Paul Manglona (R-Rota) said limiting the governor’s reprogramming authority was a compromise.

Under the new law, the governor is authorized to reprogram remaining funds available under continuing resolution and other appropriations acts for the Executive Branch, except the funds of the mayors and municipal councils.

Although not stated in the bill, the governor is not expected to reprogram funds from the judiciary and legislative branches.

While the new law would enable the government to meet payroll costs, Inos said he must caution employees that the government still faces the possible delay of releasing payroll checks as the procedure of transferring reprogrammed funds into the general fund may not be completed in a short span of time between yesterday and the close of business today.

Today is government payday, and every other Friday.

"In view of this, I am appealing to our employees for their cooperation and understanding as we continue to address this issue. I am projecting that the process of having the needed funds transferred into the general fund account may be fully realized sometime as late as Tuesday or Wednesday," Inos said in a separate statement yesterday afternoon.

Inos has been the acting governor since early Sunday morning when Gov. Benigno R. Fitial left for medical treatment in Manila, Philippines. Fitial is expected to be back this weekend.

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