Apatang signs $100.7M budget, vetoes work-hour, PSS provisions

Gov. David M. Apatang signed the CNMI’s $100.73-million Fiscal Year 2027 budget into law last Oct. 5, five days after the Legislature gave it final approval, albeit with line-item vetoes affecting government work hours, furloughs, Public School System funding, and other provisions.

House Bill 24-108, HS1, SD1, CCS1 is now Public Law 24-40. The spending plan makes $100,726,806 available for appropriation after earmarks, debt payments, and other obligations.

The governor’s vetoes, however, can still be overridden. Under the CNMI Constitution, the Legislature has 60 days from receipt of the veto message in the House, where the bill originated, to reconsider the vetoed portions. An override requires two-thirds of the members of both the House and Senate.

Among Apatang’s most significant vetoes was Section 404, which would have required most government employees to be compensated at a level equivalent to at least 60 work hours every two-week pay period during the first quarter of FY2027.

Apatang said the provision could not immediately be implemented without complying with personnel, contractual, and fiscal requirements and could create a cash-flow problem if projected revenues fall short.

He estimated the work-hour provisions, including the 64-hour requirement contemplated for PSS employees, would increase the Commonwealth’s projected budget gap by approximately $3.3 million.

“A budget provision cannot create revenues that have not been collected,” Apatang said.

According to Apatang, the Commonwealth expects to collect about $12.7 million in gross revenue each month, while roughly $4.3 million is already committed to the Minimum Annual Payment and other earmarked obligations.

PSS remains allocated $25,028,571, but Apatang vetoed provisions directing $16,177,027.52 of that amount to the first two quarters to support 64-hour work schedules and school operations. The vetoed language also called for monthly transfers of $2,696,171.25 from October through March.

Apatang said the provisions would front-load PSS funding and could leave insufficient money later in the fiscal year. He also said the measure contemplated another $7,325,484 for personnel and operations without an identified funding source, effectively budgeting about $32.35 million for PSS.

The governor also vetoed language that would have allowed employees to continue earning full annual leave, sick leave, and other benefits despite reduced work hours. He also struck a provision prohibiting furloughs until new Civil Service Commission regulations are adopted, saying existing rules already authorize furloughs.

Another veto would have required government positions to be closed once they became vacant. Apatang said that could limit the Executive Branch’s ability to respond to operational needs.

Apatang also vetoed a requirement that 50% of revolving and special-account balances be reserved for future legislative appropriation, saying some of those funds are already committed to contracts and other obligations.

On Federal Emergency Management Agency reimbursements, Apatang vetoed language reserving cumulative underrun reimbursements for legislative appropriation, saying the money is already accounted for as Commonwealth revenue.

He also struck language requiring the Health Network Program to cover stipends, airfare, and lodging for patients and escorts receiving inter-island and off-island medical referrals, saying the appropriation is insufficient to cover those costs.

The budget retains the $27 million Minimum Annual Payment to the Settlement Fund.

Apatang said his administration will implement proportionate budget reductions across the Executive Branch, including a forthcoming reduction in work hours consistent with the budget and applicable laws, regulations, and employment requirements.

Apatang scheduled a 2pm press conference for today, Oct. 6, to discuss the budget further.