PSS: State of emergency if $44M or lower budget for FY’26

07/17/2025 - The CNMI Public School System said if the Legislature approved Gov. Arnold I. Palacios’ budget submission of $44 million or lower for PSS, it would necessitate a state of emergency declaration for the primary provider of public education for the U.S. territory. 

Speaking before the House of Representatives’ Ways & Means Committee hearing last July 16, Board of Education chair Aschumar Kodep Ogumoro-Uludong and Education Commissioner Dr. Lawrence F. Camacho also outlined other scenarios depending on the approved budget PSS will be allotted for the 2026 fiscal year. 

For the record, PSS’s budget request is $49,285,558, of which $42,058,522 is for personnel costs. All others total $7,227,036 and are broken down as $1,832,681 for All Others-Programs, $305,000 for All Others-Administration, $487,855 for instructional materials, $2 million for utilities, $727,500 for debt service/contracts, and $500,000 for Capital Improvement Program.

However, the Office of the Governor, in its $179.7-million identified projected revenue in its proposed fiscal year 2026 budget, only allocated $40 million for PSS. 

Not only is that figure well short of the approximately $49 million PSS is asking for, it is also below the constitutionally mandated percentage of the annual budget PSS is entitled to, which is 25% and under Palacios’ $179.7-million proposal PSS should be getting at least $44.925 million.

The BOE chair said PSS is open to working with the Palacios administration in addressing the disparity and in fact has formed an ad-hoc committee specifically for this purpose.

“This committee will convene to be part of the conversation around the current work going on the budget, as well as to revisit previous conversations on the 25%. And interpreting that and working closely with partners, yourselves, partners from the administration, to come together and get us all on the same page as to what we're looking at in terms of projected resources and how that filters down to what our expectation is as far as the 25% is concerned,” he said.

Ogumoro-Uludong and Camacho then presented to the House Ways & Means panel five scenarios to address what they call the impending fiscal cliff brought about by a reduced budget in FY 2026.

Under the first scenario, if PSS’ proposed FY 2026 budget request is approved, as requested, at $49,285,559, there will be continuity of PSS’ operations, and this includes a full 80 hours for its employees and 180 instructional days for students.

However, if the Legislature approves only $44.3 million, under this scenario PSS will have to implement an 8-hour work reduction per pay period, translating to 72 hours per pay period and 164 instructional days for all public elementary, middle, and high school students. 

A declaration of a state of emergency will also be required of the governor to allow PSS to operate in this scenario, according to Ogumoro-Uludong and Camacho.

Under the third scenario, where only a $40.6 million is approved for PSS, it will be forced to implement a 64-hour work week and 147 instructional days. A declaration of a state of emergency will also be required of the governor to allow PSS to operate in this scenario.

And if PSS only gets a budget of $38 million, PSS will again be forced be reduce to a 64-hour work week and 147 instructional days. Aside from these, PSS will also need to implement rightsizing, which translates to a reduction of Full-Time Equivalents, or FTEs, for an estimated 42 positions through work layoff or termination. A declaration of a state of emergency will again be required of the governor to implement this scenario.

And last, under the fifth scenario, if PSS is allowed to operate only with a $33-million budget, it will again be forced to reduce to a 64-hour work week, 147 instructional days, and implementation of rightsizing for an estimated 90 positions through work layoff or termination and merging of schools. Like scenarios No. 2 to No. 4, a declaration of a state of emergency will again be required of the governor to implement this scenario. 

During the hearing, Ogumoro-Uludong also clarified that the reported $7-billion cut on federal funding from the U.S. Department of Education nationwide is, in actuality, a pause on the release of monies. 

“So, there was no cut. There's a difference between a cut and withholding of funds. So, it's important to understand that,” he said, while adding that since that false story came out, around 76% of that withheld funding has been released. 

Camacho, for his part, shared that while almost 90% of public schools in the CNMI have met or exceeded district goals, they will face financial challenges this coming fiscal year that will be exacerbated with the depletion of PSS’ American Rescue Plan Act funding. 

“We fully understand that PSS no longer has that federal ARPA funding cushion to help offset the gap so we present our fiscal year 2026 budget that will be allocated to fund personnel with $42 million going to 942 FTEs comprised of school administrators, their admin staff, teachers, teacher aides, instructors, librarians, counselors, program managers, and state and district staffing to support 20 schools and 10 Head Start centers across three islands,” he said.

Report by Mark Rabago