LONG OVERDUE $60 MILLION PALAU BUDGET PASSES


Bill awaits President Toribiong’s signature

By Aurea Gerundio-Dizon

KOROR, Palau (Island Times, March 5, 2012) – The hotly-debated budget proposal for Fiscal Year 2012 finally passed both houses in the Olbiil Era Kelulau last night.

Information gathered by Island Times revealed that after almost two hours of debate in Senate, the affirmative votes on the first conference committee draft of the budget bill, which was earlier rejected by the House and considered to be dead, was recalled.

Following the Senate’s recall of its action on CD1, CD2 was brought to the floor and voted on after discussion. Eight voted yes on the newest version of the bill (CD2) while five voted no.

Voting against the new version were the senators in the minority bloc including Sen. Surangel Whipps Jr., Sen. Tommy Remengesau Jr., Sen. Camsek Chin, Sen. Raynold Oilouch and Sen. Hokkons Baules.

Sen. Mark Rudimch, Sen. Joel Toribiong, Sen. Kathy Kesolei, Sen. Paul Ueki, Sen. Regina Mesebeluu, Sen. Regis Akitaya, Sen. Alfonso Diaz and Senate President Mlib Tmetuchl voted yes.

In the House, the CD2 also passed with 12 yes and two no votes. Del. Jonathan Isechal and Del. Celestine Yangilmau were not present during the voting.

Voting no on the new version were Del. Horace Rafael and Del. Jerry Nabeyama.

Del. Swenny Ongidobel, Del. Lentcer Basilius, Del. Tmewang Rengulbai, Floor Leader Gibson Kanai, Vice Speaker Alexander Merep and Speaker Noah Idechong voted yes.

Del. Secilil Eldebechel, Del. Noah Kemesong, Del. Kalistus Ngirturong, Del. Rebluud Kesolei, Del. Marhence Madrangchar, and Del. Wayne Andrew reportedly abstained from voting. However, under OEK rules, abstention is considered an affirmative vote.

The newest version of the budget bill authorizes the sum of $60,855,000 and appropriates a total of $59,394,000.

Senate Bill No. 8-209, HD7, CD1, CD2 explains that the newest version of proposed Budget Act is a result of a compromise between the president and both houses in the OEK.

The bill states that the OEK recognizes the existence of over-expenditures of the national government for FY 2011 and that this proposed Budget Act may fully reflect the actual budget needs of the national government for FY 2012.

[PIR editor’s note: Island Times reported that, in consultation with President Toribiong, language was inserted into the final approved budget bill addressing concerns raised by lawsuits filed against the President regarding his expenditure of resettlement funds for Uighur refugees. The inserted language makes it clear that if terms of foreign assistance grants require the President to set aside normal appropriation processes, the President shall inform the Olbiil Era Kelulau (OEK, Palau’s Legislature) of the reason for the expenditure and if both houses of the OEK do not explicitly reject the suspension of normal processes then the expenditure will be considered legal.]

The bill states that if a supplemental budget is needed later then that supplemental budget will address the essential services of the national government that may have been underfunded.

It is anticipated that the president will be submitting request to the OEK within 60 days of the effective date of the proposed Budget Act.

The bill showed that source of funding for FY 2012 will include $17,750,000 from Compact funds and $37,994,000 from local revenues (not including green fee revenue that amounts $1.4 million).

Also, the bill did not cut appropriations for state governments.

The bill states that PAN funds or green fee revenue shall be increased from $15 to $30. The money generated from the green fee collection shall be deposited in two separate accounts.

In the allocation of PAN funds, 50 percent shall be appropriated for the sole purpose of the operation of PAN while the other 50 percent shall only be authorized and appropriated for the sole purpose of improving the water and sewer system of the Republic.

The first $200,000 collected shall go to Airai State Government for the sole purpose of the protection and preservation of the water source and its ecosystem in Airai, which provides 80 percent of Palau’s potable water.

On state of emergency expenditures, amendments to the laws signed by the president were added. A language in the bill was added that states “the OEK hereby deems the authorization and appropriation contained in RPPL 8-34, as amended by RPPL 8-35 and Section 26 above, as being in compliance with the House Joint Resolution 8-62.”

Another amendment reflects the amount of funds actually expended by the president during the state of emergency. Instead of $3 million, the bill only authorizes and appropriates $1,125,854 that shall come from local revenues.

As to the over-expenditures in FY 2011, the OEK agrees to work with the executive branch to address the over-expenditures in the future by consideration of a proposed supplemental budget act.

On low-income assistance, the bill appropriates $75,000 for the purpose of providing subsidies to households by way of paying stipend of $100 per month to each of the families identified by the 2009 Household Income Survey conducted by the Ministry of Finance as having no income.

The bill requires the Finance minister to provide monthly report to the OEK and the Public Auditor on each $100 stipend provided to low income families.

The proposed increase in hotel room tax (12 percent) was also included in the newest version of the budget bill. The bill states that the hotel room tax and the Vessel Cabin Occupancy Tax will be combined as one tax. This will apply to any transient occupant of the Republic, regardless of whether it is in a cabin on a ship or a hotel room.

On Social Security and Medical Savings Fund, a language was added in the bill that states all funds received by the SSA from the national government that are designated to be deposited into the Medical Savings Fund shall be deposited into the Medical Savings Fund.

Earlier reports showed President Toribiong wrote SSA requesting them to redirect to the Healthcare Funds the payments made by the government for the Healthcare Fund contributions of its employees.

The SSA reportedly diverted payments into the Social Security Fund based on Social Security regulation (Section 1025) that gives the Social Security Fund priority over the Healthcare Fund.

Following passage of the budget bill in both houses of the OEK, it will be transmitted to the president for his signature.

Island Times
Copyright © 2012 Island Times. All rights reserved.

Source: http://pidp.eastwestcenter.org/pireport/2012/March/03-12-04.htm

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One Comment on “LONG OVERDUE $60 MILLION PALAU BUDGET PASSES”


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