With fiscal year 2027 set to begin Thursday, Oct. 1, House and Senate conferees began 11th-hour negotiations last Monday, Sept. 28, over the Commonwealth’s $100.73-million spending plan, but recessed after three hours without reaching a final agreement.
The emergency conference committee meeting came a day after the House voted 17-1, with one abstention, to reject the Senate-amended version of House Bill 24-108, HS1, forcing the two chambers to reconcile their differences with the new fiscal year just days away.
The House had unanimously passed its version of the $100.73-million FY 2027 budget last Sept. 18. The Senate approved an amended version last Sept. 27 and returned it to the House, which rejected it later that day.
Senate Fiscal Affairs Committee chair Sen. Jude U. Hofschneider acknowledged the rapidly shrinking window as conferees began tackling the differences between the two versions.
“We were pressed with time to come up with a product before we submit to the governor,” Hofschneider said.
House Ways and Means Committee chair John Paul Sablan, meanwhile, laid out the House’s main objections to the Senate version.
“The reasons were the significant cut for Commerce, the cut for [the Northern Marianas College], the cut for [the Public School System], and to include the additional 19 NOPs that were additionally included into Schedule A,” Sablan said.
Sablan also cited Federal Emergency Management Agency-related provisions and “the reprogramming authority for the administration that we found perhaps might be problematic” because of the Marianas Public Land Trust line-of-credit agreement.
At the center of the disagreement is the Senate’s decision to redirect millions of dollars from the Public School System, Northern Marianas College, and the Department of Commerce to increase government employee work hours.
Fiscal staff told conferees that approximately $12.5 million was taken from PSS, about $2.5 million from NMC, and $767,000 from Commerce. Much of the funding was used to increase government employees from 38 hours to 53 hours per pay period. NMC would be left with approximately $4 million.
“The cuts that you just mentioned about PSS, Commerce, and the NMC, those funds were diverted for personnel, to lift them up to 53. We just want to make that clear to the viewing public,” Hofschneider said.
The Senate plan, however, would allow PSS teachers and support staff to remain at 64 hours per pay period during the first two quarters of FY 2027.
Conferees were told PSS needs at least $32 million to maintain those hours for the entire fiscal year. The Senate version identifies $25 million, leaving approximately $7 million that would have to be identified during the first six months, including potentially from revolving accounts and excess revenues.
After meeting since about 3pm Monday, conferees recessed Monday evening without completing their work. They are scheduled to resume negotiations today, Sept. 29, at 9:30am.
That leaves the House and Senate little time to agree on a single spending plan, approve the conference committee report, and send the FY 2027 budget to the governor before the new fiscal year begins Thursday.
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