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Sen. Manglona seeks AG’s opinion on budget issues

SENATOR Paul A. Manglona is seeking Attorney General Edward Manibusan’s legal opinion on the “exclusion” of $45 million in Saipan casino tax funds from the general fund. The lawmaker said the $45 million was classified as “special fund for specific purposes” and was not factored into the calculation of the general fund.

Manglona said the Public School System is supposed to get 25 percent of the general fund.

Attached to his letter to the AG is the senator’s four-page speech on Saturday during the session held by the Senate to pass the fiscal year 2018 budget bill.

Sen. Sixto Igisomar, right, speaks during the budget session on Saturday as the other senators listen. Photo by Cherrie Anne E. Villahermosa

In his speech, Manglona said: “We have disallowed more than $45 million from the 25 percent formula. This action is very much questionable…. Just because the Legislature conveniently classified a particular budget item as earmarked, doesn’t make it a special fund reserved for specific purpose and thus become excludable from the 25 percent computation. This is what we did in some cases; furthermore, in several special accounts identified by the AG as separate from the general fund, we budgeted an amount more than what the particular earmarking law authorized.”

He said in the current fiscal year there was an additional $20 million in revenue that was not included in the budget but was expended anyway.

He added that PSS should have gotten its 25 percent share from the additional $20 million revenue.

“This is a significant discrepancy that we must address today because if we continue to appropriate less than what the government estimates to collect in a given year and allow itself to spend more than what was authorized under the budget law, we are essentially short-funding PSS of their guaranteed 25 percent every fiscal year.”

Manglona said devoting more funds to PSS can allow the CNMI to develop more island-relevant curricular materials, including readings and stories based on island culture and geography. He said the CNMI can also expand teacher training programs in math and science based on the local culture to stimulate student interest in STEM or Science, Technology, Engineering, and Mathematics.

“Only by investing more money in PSS can we truly develop a STEM-literate commonwealth,” he added.

“Giving more money to PSS does not necessarily mean less money for [the Commonwealth Healthcare Corp.] and [the Department of Public Safety]. These two departments, as well as other public services, are very critical also and must be properly funded. We just have to prioritize our resources.”

He said the $1.2 million set aside for the salary increases of elected officials could have gone immediately instead to CHCC, DPS and other programs as originally proposed by the Senate.

He added that if these funds were given six months ago to CHCC, DPS or the Department of Public Works for basic infrastructure improvements, they could have gone a long way.

Manglona said he is also concerned “about our newly disclosed substantial additional financial obligation to the Settlement Fund. Its trustee, attorney Joyce Tang, demands prompt payments of additional amounts in the minimum annual payments based on audited annual government revenue. As I mentioned earlier, for FY 2014 and 2015, this comes out to approximately $7 million. Considering that our annual revenue continues to rise each year, this additional payment could reach as high as $6 million per year.”

He added, “Before this significant additional payment obligation in the Settlement Fund agreement was revealed to the Legislature, it appeared that the payment for the 25 percent reduction in retirement pensions was no longer at risk. Now with this new obligation, it is incumbent upon us, as lawmakers, to do a diligent analysis of the annual government resources to verify the accuracy of our financial projections. In this way, we can already incorporate this additional Settlement Fund payment amount in each FY budget law. Such action would have been prudent to take in this FY 2018 appropriation measure.”

Manglona said in the FY 2018 budget bill, “we owe PSS approximately $11 million more in funding…, and the Settlement Fund approximately $6 million more in adjusted annual minimum payment pursuant to the Settlement Fund agreement, for a combined total of $17 million (not counting the $14 million shortfall from the casino gross revenue tax), that the Legislature failed to incorporate.”

Manglona was the only lawmaker who voted against the passage of the budget bill.

Correction

Monday’s news story, “Budget Bill Now with Governor,” should have stated that Sen. Justo Quitugua advocated allotting 25 percent — and not just 5 percent — of the next casino GRT collection for PSS.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/98651-sen-manglona-seeks-ag-s-opinion-on-budget-issues

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