This week the Legislature overwhelmingly passed House Bill 16-79, SD2, HD2, SS1, and today sends the bill to the governor. Eight senators voted yes on the bill, with only Senate President Pete Reyes abstaining. Sixteen representatives voted yes on the bill, with only Rep. Edward Salas and myself voting against it, and Rep. Stanley Torres abstaining. Rep. Ray Yumul was absent. House Bill 16-79, SD2, HD2, SS1 was a substitute bill for House Bill 16-79, originally sponsored by Speaker Arnold Palacios, Rep. Heinz Hofschneider, and myself. The original bill proposed to repeal Public Law 15-94, which rolled back the utility rates to 17 cents/kwh, and return CUC to the rate structure that had been in place before Public Law 15-94 in order to allow CUC to charge rates that would cover the cost of fuel.
The substitute bill that passed in the Senate two days ago, and in the House yesterday was very different. Indeed, it was a combination of two bills, HB 16-79 (mentioned above) and HB 16-90, which had proposed to grant the governor and other expenditure authorities unlimited reprogramming authority for lapsed funds in the remainder of the fiscal year, and to borrow from the Retirement Fund in order to subsidize fuel, among other measures. House Bill 16-90 had passed in the House last week on first and final reading the day it was introduced, with only one “no” vote (mine), and without a committee report.
The resulting combination bill, House Bill 16-79, SD2, HD2, SS1, also came with provisions not found in either the original HB 16-79 or HB 16-90. The Senate Fiscal Affairs Committee, to its credit, did come out with a report that attempted to justify the passage of the bill, but even that report acknowledged a glaring lack of information about the potential impacts of the proposed legislation.
If signed into law, House Bill 16-79, SD2, HD2, SS1 would:
In my comments today on the floor, I stated that I could not in good conscience support HB 16-79, SD2, HD2, SS1 because it is, at its core, an act of fear and poor planning.
While I fully realize the dire straits into which CUC has fallen, we solve neither our immediate nor our long term problems by raising taxes without cutting costs, by borrowing from the Retirement Fund which is teetering on the brink of insolvency because of this government’s continuing failure to pay its debts, or by making the Public Utilities Commission vulnerable to abuse. I noted that we are actually even worsening our problems by further increasing our liabilities, damaging our credit rating, and impairing our ability to secure financing for critical infrastructure at affordable rates — at a time when we are considering not one, but several proposals, to issue public debt.
I also asked how we could possibly pass this bill without having a full picture of the funds that would be generated and the impacts on public services.
We did not know, for example, how much money actually exists in CUC’s trust fund for security deposits. We also could not say with a reasonably straight face, not matter what the bill said, that we actually expected CUC, notorious for its accounting mishaps and auditing nightmares, to use only 50% of the security deposits and return those funds within three years.
We had not investigated the potential impacts of raising taxes — on banks and other financial institutions, and on all clients of the CNMI government who would have to pay 100% higher fees now to drive, get married, obtain a police report, etc.
We proposed to borrow, once again, from the Retirement Fund — even after just receiving their very sobering actuarial report last week, knowing that the Fund has been forced to liquidate assets to pay its pensioners, knowing that the central government has not been paying into the Fund at all, knowing that the Fund cannot afford it, and knowing that the government’s liabilities to the Fund comprise the single largest reason why the government’s financial performance ratings have declined dramatically, hindering our ability to secure bonds at affordable rates, at a time when we are considering issuing public debt to finance a utilities overhaul and to pay off our obligation to the Fund. When does the bleeding stop?
We did not know the impact that these measures will have on the Marpi landfill, which is already bordering on noncompliance with EPA standards and may be shut down or subject to hefty fines as a result of this bill, if signed into law. We also did not know the impact of these measures on the public services that depend on the Tobacco Control Fund.
We also proposed to give $80,000 in startup funding to PUC, not knowing whatever became of the funds that had supposedly remained with the now-defunct Commonwealth Telecommunications Commission. This question was raised at the House session last week, but it was never resolved. Even more alarmingly, the bill proposed to allow PUC to set rates without a quorum, even if there is only one commissioner, and without prior public hearing or notice, or any supporting documents, or any discussion or deliberation. Why, then, even have a PUC? Is it really that much worse to have an unregulated utility, than to have one or two PUC czars calling the shots under the guise of oversight?
And we proposed, once again, to give the governor and other expenditure authorities unlimited powers to reprogram lapsed funds, retroactive to October 1, 2007, not knowing if they have already exceeded their budget authority, nor even knowing exactly how much money we are talking about, since apparently the most recent data that the Senate Committee had at its disposal when it drafted its report are almost three months old. Moreover, we tread into dangerous territory when we relinquish our authority to control the government purse. Suppose the Governor were to use his unlimited reprogramming powers to direct funding towards costly litigation against the federal government, or towards expensive and ambiguous consultancies? Can any of us honestly say that this would be a prudent use of funds in the best interests of the public, given our serious infrastructural and fiscal woes? But the bill offers no controls whatsoever to safeguard against waste. Unlimited power is, well, unlimited.
I asked at the session, How can we vote on this measure not knowing, really, what we are voting on? How is this bill a solution? And I stated that we have not done enough as a body with the solutions that are already staring us in the face.
We know, for instance, that there are unexpended federal funds – tens of millions of dollars available to the CNMI for capital improvements — that could be directed towards CUC, but are not. Why not? I said that we could certainly do far more than we have thus far to investigate the reasons for this government’s failure to utilize these funds, and make those reasons known to our people, who are asking the very same questions. I also noted that House Bill 16-77, which would lay down the guidelines for a transparent and legitimate privatization process for CUC, that includes mandates for renewable energy, sits in the House PUTC committee, and that we could act on that bill. I finally noted that we could do far more to cut costs in all branches of government — that downsizing is inevitable, but we have to have the will and the capacity to be honest with our people when we do so.
I also recalled the Speaker’s inaugural address just four months ago, during which he urged for a new era of policy-making to begin with this legislature. He said that we must stop with the shortsighted, shoot-from-the-hip strategies that have characterized legislatures of the past. He also said that we needed a plan. I agree.
While we all recognize the urgency of our times, we should not be driven by fear or desperation when we act. We do indeed need a plan – a sound, cohesive, transparent, and long-term plan that involves the concerted efforts of all the leaders of the Commonwealth. Such a plan cannot be developed in private, backroom meetings where deals are struck between a handful of members and the governor (which was essentially how HB 16-79, SD2, HD2, SS1 was developed). These meetings are the trademark of old policies and tired politics that have not served our people.
Such a plan also cannot be developed alone, and I noted that while I was fully cognizant that there is only so much that I can do as one member — and a freshman and independent, at that – I am nevertheless ready to participate and lend my full support if and when the members of the Legislature and the administration would be ready to change the old ways of doing things and engage in meaningful and measured planning and action.
In the meantime, however, I said that I could not be complicit in the shortsighted and fear-driven policies that were put forth in the bill we just passed. I requested that my name be removed from the list of sponsors (all of the original sponsors of HB 16-79 were still listed on this substitute bill), and I ultimately voted no.
The response of other members was, interestingly, not to deny anything that I had said, except for the part about the bill being driven by fear. It was said that this bill, instead, is driven by “reality” — the reality that CUC is penniless and may run out of fuel and no one wants to be blamed for not taking action if islandwide blackouts occur. It was also said that because this bill is an appropriations bill, that the governor would have the power to line-item veto parts of the bill that he would find undesirable, and the hope was expressed that he would delete the provisions that the Senate had added that would grant undue powers to the PUC.
The “reality” I see, however, is that we have been worried about CUC running out of fuel for months and still we do not have a plan; that we continue to strike deals in private backroom meetings rather than tackling the CUC problem openly, transparently, and cooperatively among all the leaders of the CNMI; that we would abruptly raise taxes for banks and essentially raise taxes in the form of doubled government fees without so much as a fiscal impact analysis; that we still have not cut government payroll in any significant way; that we have given the governor unlimited reprogramming authority and have provided no real safeguards against waste; that we have not yet taken action on critical privatization legislation before us; that we have made it possible for the PUC to set rates with a “quorum” of one person; that apparently tens of millions of unspent federal capital improvement funds are sitting in the bank that could be used for utilities but, inexplicably, are not; and that we instead prefer to once again borrow from the Retirement Fund as a band-aid fix, crippling the already-crippled fund even more while still not saving CUC.
IN OTHER NEWS
Update on House Resolution 16-9
House Resolution 16-9, which proposes to amend the House rules to require at least three business days’ notice, with agendas, for legislative sessions and committee meetings, and to require the posting of legislative records on the official Legislature website for public access, has been sitting on the resolution calendar for nearly a month waiting for action. At yesterday’s session, I asked when the body would be acting on the resolution.
The Speaker noted that he had asked the Floor Leader, Rep. Joseph Camacho, who also chairs the Ad Hoc Committee on the Rules, to review the proposed amendments and come out with a report. Floor Leader Camacho stated that his committee did not yet have a report and he asked for more time, as the proposed amendments were “controversial” and would therefore require proper review. I asked what exactly was so controversial about requiring public notice for legislative meetings, and the Floor Leader’s response was that public notice could be “costly” and also hinder the efforts of the Legislature to address the many pressing problems facing the Commonwealth. I then responded out that the proposed amendments to the rules did include provisions for waiving public notice in the event of emergencies, and also remarked that there were costs involved in passing legislation without proper review and opportunity for public comment, too. I then requested that the Speaker issue a deadline for the Ad Hoc Committee on the Rules to come up with a report on the resolution, and he ordered that a report should be issued as soon as possible, but no later than three weeks from yesterday, May 1. The Floor Leader then made a motion to remove the resolution from the calendar and refer it to his committee, and the motion passed by a majority voice vote.
It is rather ironic that the “controversy” of yesterday’s session was, not the bill that would borrow from retirees to pay for fuel, raise taxes, give the governor unlimited reprogramming authority, and make a travesty of PUC, but a resolution that simply proposes to give the public full and fair notice of legislative meetings, and online access to legislative records. Where House Resolution 16-9 has been sitting on the calendar for a month and apparently requires extensive committee review before the body can act on it, House Bill 16-79, SD2, HD2, SS1, by contrast, passed on first and final reading in back-to-back Senate and House sessions, with little to no opportunity for public comment.
On the Resident Foreign National Status Act, HB 16-86
House Bill 16-86, introduced last week by myself and Reps. Hofschneider, Salas, and Hocog, proposes to amend the CNMI immigration code to add a new permit category of “Resident Foreign National” that would give eligible foreign national workers five-year permits to work at will in the Commonwealth. The bill is intended to stabilize the CNMI’s workforce, particularly in this transition period between when the federalization bill is expcted to be signed into law (soon) and when the federal immigration regulations are promulgated (a year to 18 months from the date of enactment); to stabilize the business community and relieve the bureaucratic burdens that businesses must undergo with the current system of annual permit applications and renewals; to stabilize families in the Commonwealth whose members include citizens (many of whom are children) and long-term foreign national workers who are restricted to a single employer, unable to transfer jobs without an administrative hearing, and subject to a two-month or six-month periodic exit under current labor law; to promote competition among employers for labor, and thereby encourage higher wages and better working conditions overall for all workers, citizen as well as non-citizen; and to relieve the administrative and regulatory burdens of the Dept. of Labor.
Some controversy and misunderstanding surround this bill, to be sure. I am preparing a more extensive statement to explain the purposes of the bill, which should be coming out shortly, and to address the concerns and confusion that have come to the attention of the Legislature. There should definitely be greater community dialogue about not only the practical, economic issues, but also the social and moral issues that are raised by the bill.
The bill’s cosponsors and I will be on the Harry Blalock show on Monday at 7am. It will be a call-in show (235-5064), and all comments and questions are welcome.
On the gambling bill, HB 16-82
As was reported last week, the House voted overwhelmingly to kill House Bill 16-82, which would have authorized casino gaming at La Fiesta Mall. I was among the members who voted no on the bill, for the reasons that were cited by several other members on the floor before we cast our votes: 1) the people of Saipan had just voted no on the casino initiative in November 2007 and we should respect their wishes; 2) the Tinian and Rota casino industries should be allowed to develop without the constant uncertainty posed by efforts to legalize casino gaming on Saipan too.
On the Senate Joint Resolution re the proposed Marianas Trench national monument
I was extremely disappointed by the Legislature’s adoption of the Senate Joint Resolution that asked President Bush to refrain from unilaterally designating the area surrounding the three northernmost islands of the CNMI a national marine monument and further expressed “fervent” opposition to the proposal. I stated on the floor that I felt it would be premature for us to reject the proposal outright when most of us had not even heard the proposal, when discussion in the community had just begun, and when there were clearly many misperceptions and misunderstandings even among the legislators that had not yet been fully aired and addressed. I offered amendments that would have removed the clauses that “fervently opposed” the national monument proposal altogether, while retaining the clauses that opposed unilateral designation and that requested more information. None of the amendments I offered was adopted. Some members claimed that there was an “urgency” in passing the resolution as soon as possible. Three members voted no to the resolution: Reps. Hofschneider, Salas, and myself.
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