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Tuesday February 5, 2008 By Moneth G. Deposa Variety News Staff
Finance Secretary Eloy Inos appears perplexed by the question posed by Rep. Diego T. Benavente, back turned to the camera, during the House budget hearing, Friday, on Capital Hill. Photo by Mark Peñaranda
FINANCE Secretary Eloy Inos on Friday said the administration’s proposed $160.1 million budget for fiscal year 2008 does not fund three items amounting to $12 million.
These are the $3 million projected shortfall in the government’s health insurance program after the amount of claims exceeded the premiums; the 7 percent difference in the government’s employer contribution to the Retirement Fund; and $7 million for government holidays.
The administration proposed an 11 percent Retirement Fund contribution, but lawmakers approved an 18 percent rate. The governor signed the bill “with serious reservations.”
The administration also asked lawmakers to pass a bill suspending the government’s holiday pay.
During Friday’s budget hearing conducted by the House Ways and Means Committee, Inos said lawmakers should be aware of the “financial impact” of having a budget that does not fund certain areas.
This, he said, will bring “chaos” to the CNMI.
“The current issue on the table now is with respect to runoff claims from the old health insurance program where the amount of claims exceeded the premiums,” Inos said. “This is one important area that was not considered in the $160.1 million proposed budget.”
He said the budget they submitted was based on an actuarial study indicating that the government can only afford a Retirement Fund contribution rate of 11 percent.
“Now that we will be required to pay 18 percent, we’ve got to have a source of funds to be able to do it,” Inos said.
The funding for the 14 holidays of the commonwealth — $7 million — is also a concern, he added.
“We anticipated the passage of the non-holiday legislation, which did not happen, so if we continue this current situation, we’re going over the cliff,” Inos said.
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