President Toribiong Opposes Revised Palau Budget Bill

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Leader pushes for full funding of previous version

By Aurea Gerundio-Dizon

KOROR, Palau (Island Times, July 16, 2012) – Following the House of Delegates’ (HOD) passage of the supplemental budget bill Friday, Palau President Johnson Toribiong issued a statement opposing to the version of the lower house.

The president said he had reviewed the House’s version with his ministers and the bill does not reportedly appropriate sufficient money to fund all the Executive Branch’s activities through the end of the fiscal year 2012.

Toribiong said what he requested in the supplemental budget proposal was the substantial amount for fixed costs.

"I do not know on what information the House committee on ways and means decided not to fully fund the Administration's requests, but there certainly are enough revenues to do so," Toribiong said, adding that as of Friday, local revenues are already exceeding projections for FY 2012 by about 8 percent or $3.3 million.

The president insisted that the House version of the bill does not appropriate enough funds for the offices of the President, Vice-President, and Ministry of Finance to continue their normal activities through the end of the fiscal year, not to mention funding for ever increasing costs of utilities, health care contributions, and taxpayers' refunds that will still require additional funding after the enactment of the pending supplemental budget.

"I will have difficulty considering signing any bill that does not reinstate all the amounts originally requested by the Executive Branch for its activities," the president said.

Toribiong said he will be meeting with Olbiil Era Kelulau (OEK) members today to discuss about the bill. The president wants the bill to be concluded and passed by no later than Friday "if certain critical services are to continue."

"The failure of the OEK to do so by such time will present significant problems for the national government to continue operating, and will likely result in unnecessary suffering by government employees and the public in general," Toribiong said.

Asked if laying-off of employees will likely happen, the president said he does not want anybody in the government to be laid off.

But contrary to a memo issued earlier by the Ministry of Finance that bore the signature of the president, in place of Vice President and Finance Min. Kerai Mariur who was off island at the time, the ministers and directors were instructed to identify which employees are necessary to operate at a reduced level and which employees will have to be laid off until funds become available to pay them.

This time, the president said he will not allow laying-off of employees to happen.

Toribiong hopes to convince the OEK to approve his original request for supplemental budget.

He said that the legislative finding in RPPL 8-40 (the FY 2012 National Budget Act) states the following: "The Olbiil Era Kelulau recognizes the existence of over-expenditures of the National Government for Fiscal Year 2011 and that this Budget Act may not fully reflect the actual budget needs of the National Government for Fiscal Year 2012. If a Supplemental Budget is needed then that Supplemental Budget will address the essential services of the National Government that may have been underfunded. The OEK anticipates a Supplemental Budget request being submitted to the OEK by the President within 60 days of the effective date of this Act. The OEK agrees to a prompt consideration of such Supplemental Budget request for Fiscal Year 2012."

Toribiong said it was known during the passage of the FY 2012 National Budget Act that the national government is underfunded. "I hope we can work things out with the OEK before Friday," he added.

Toribiong said that as soon as the supplemental budget bill will be passed, the executive branch will be submitting the FY 2013 national budget proposal.

Yesterday, Sen. Mark Rudimch disclosed that the Senate received the House’s version of the supplemental budget bill on Friday.

The HOD version appropriated the sum of $4,467,400 to supplement the general operations of the national government. The bill removed Section 14 that is regarding FY2011 over-expenditures, added a new section for subsidiary non-recurring funding of $100,000 for state-related expenses, and included various amendments regarding the payment of judgments and cost of living allowance.

The House version is lower compared to the proposed amounts by the president and the Senate. The president proposed appropriation of additional $4,476,000 while the Senate proposed appropriation of additional $4,531,000.

Rudimch said that a Senate session has yet to be scheduled to entertain the House version.

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