Embedded Files
09/29/2025 - The House of Representatives passed the Fiscal Year 2026 budget last Sept. 27, adopting the Senate’s amended version passed the day before to maintain $179 million in government spending despite administration warnings of shrinking revenues.
The bill, House Bill 24-46 HD1 SS1, cleared the House with unanimous support from all 18 members present, ensuring that government operations continue beyond the Oct. 1 deadline and averting a shutdown.
Gov. David M. Apatang had earlier advised that available resources had dropped to $156 million, $23 million less than the budgeted figure. Delegate Kimberlyn King-Hinds also relayed that the U.S. Department of the Interior expects tangible signs of austerity from the CNMI before extending financial assistance. But lawmakers said they had no time to rebuild the budget plan before the deadline and instead promised to work with the Senate and the administration to course-correct in the coming weeks.
House Ways and Means chair Rep. John Paul Sablan described the budget as both a safeguard and a starting point.
“This has been a demanding process, but it has also been a moment where the Legislature has shown responsibility, unity, and a commitment to our people in the face of difficult fiscal realities,” Sablan said.
He explained that cutting $23 million without hearings or consultation “would be irresponsible” and stressed that reductions must be equitable, strategic, and carefully planned.
“What we need are equitable reforms and reasonable austerity measures that reflect the size and core functions of our branch. If there are cuts to be made to right-size, cuts must be strategic, targeting only what is really in excess, not where they would cripple essential services,” he said.
Rep. Blas Jonathan Attao echoed that sentiment, emphasizing the urgency of preventing a shutdown.
“I understand that the numbers that were presented to us by the administration were given on Monday, and we made this promise that we, before we tackle that issue, would make sure that we don't get into a government shutdown. We've done that. We're giving this opportunity, and we're giving the administration some time. I'm not going to say a large amount of time, but some time to review this budget so that he, Gov. Apatang, and Lt. Gov. [Dennis C.] Mendiola can look at the bill and see what they like and remove those that they don't like. But at the very least, sign the bill into law so we can prevent a government shutdown. That was the approach, first and foremost,” he said.
Speaker Edmund Villagomez praised the cooperation between both chambers and the administration, saying the Legislature met the deadline and kept its priorities intact.
He acknowledged that the bill is not the final product but expressed confidence that collaboration will lead to a more accurate budget in the weeks ahead.
“This was something that we all came together and we can agree upon. And as mentioned earlier, this is not going to be the final product. I know the work continues after this, but with this collaboration, I think we can meet the deadline and also meet our goals and hopefully come up with a fair and balanced product,” he said.
Rep. Roman C. Benavente highlighted the need for fairness, particularly in the debate over the Public School System’s demands, saying PSS is actually using the schools to pawn for their interests as far as the central office is concerned.
“That's really bad. I'm not scared to say this because I've met with them. I communicate with them. But still, I just heard that they're trying to do another town hall meeting. Another series of town hall meetings. Fine. That's good. Because we also have to let the people know that this budget is not only for themselves. We also need this budget to pay all the other individuals who are working for the government. They have to understand that if they shut down the budget, if we shut down the budget, people who are working for the government, or if we had given more to PSS and less to the working individuals in the government, what would happen? Even their own kids who are going to school, their parents would not be able to afford to pay for their needs to go to school and everything in regards to that,” the former Board of Education chairman said.
Rep. TJ Manglona, meanwhile, pointed to communication as the key to navigating the Commonwealth’s financial crisis. “This budget is not a final product. It’s a moving target,” he said.
He added the need not to go to a conference committee to decide the budget was a first, and he hopes this will continue moving forward.
“Maybe we can create some sort of working group that we can meet every now and then and discuss the bills and the legislation that we want to move so that our priorities are in order with the Senate, so we can address each other's concerns.”
Rep. Julie Ogo thanked fiscal staff and agency heads for their input during deliberations, but emphasized that sacrifices will still be required.
“It is not an easy task to work with very limited funds. But together we navigated these challenges with professionalism and commitment. At the end of the day, sacrifices must be made. And we must all continue to work within our means.”
Rep. Ralph Yumul also urged colleagues to tread carefully with additional austerity measures. He reminded Sablan and the Ways and Means Committee of a Finance memo projecting another $22-million shortfall, but said across-the-board cuts could hurt both families and the economy.
“The last two years we've been, I guess, practicing austerity, and to go from 80 hours to 64 hours, that's drastic. I think going back to the 70 hours would help stabilize the economy... The question now is how much we are going to squeeze our employees, and what does that translate to when it comes to the economy? You're forcing the economy to constrict, and that's very dangerous. That's something that we shouldn't look at,” he said.
The evening earlier, on Sept. 26, the Senate passed House Bill 24-46, HD 1, with all eight senators present saying yes to approving the bill, now in the form of House Bill 24-46, Substitute 1.
Its version of the fiscal year 2026 budget chose to retain the House of Representatives’ $179-million ceiling despite a last-minute downward revision in projected revenues.
Lawmakers explained that maintaining the higher figure was necessary to avoid a potential government shutdown and to give agencies breathing room while longer-term fixes are worked out.
Senate Fiscal Affairs chair Sen. Jude Hofschneider, who introduced the body’s amendments, said the decision came down to timing.
The Senate received notice of reduced revenue projections only days before final deliberations, leaving no realistic window to rework the entire budget.
Hofschneider said, adding that future revisions could still be made once additional resources are identified or once the administration finalizes borrowing plans.
Among Hofschneider’s amendments were clarifying provisions on reprogramming authority, labor funding, and obligations to retirees. Key changes included:
Reprogramming authority: The governor and municipal mayors were each granted up to 25% reprogramming flexibility.
Corrections and detainee costs: The Department of Corrections will cover all transportation expenses for detainees traveling between Saipan, Rota, and Tinian for court-ordered activities.
Retiree payments: Excess Office of Grants Management funds will be reserved for group health and life insurance and the 25% retiree pension obligation. A separate $2.49 million was also earmarked for retiree settlement payments.
Hazard pay: Solid Waste Management must satisfy $179,691 in owed hazardous pay to employees on all three islands before using funds for other programs.
MVA trust funds: Mayors were guaranteed not less than $175,000 annually from their share of the hotel occupancy tax, with quarterly reporting requirements.
Former Casino Commission members: $210,000 from the IPI settlement was allocated to cover unpaid salaries.
Workforce training: $10,000 each was designated for Rota and Tinian’s Department of Labor to fund apprenticeship and training programs for U.S. citizens.
Public Lands: Funding for the Department of Public Lands was raised from $4.8 million to $6 million, with $4 million required to be remitted to the Marianas Public Land Trust by October 15.
Senators also noted that pending measures such as changes to the construction tax, transient accommodations tax, and casino law could help restore revenue closer to the original $179-million projection. In the meantime, they stressed that passing a budget on time took priority.
“This is not the end of this budget,” Senate President Karl King-Nabors said. “We'll return in short order to begin to identify and understand what the ripple effects of the reduction in the ceiling of allocations are,” he said.
Report by Mark Rabago
Report abuse