SAIPAN — Governor David M. Apatang on Oct. 14 submitted a revised Fiscal Year 2026 budget to the 24th Commonwealth Legislature that lowers projected revenues, institutes austerity, and presents two spending plans that hinge on a proposed $29 million pension loan for the NMI Settlement Fund.
The administration now projects gross revenues of $158,018,391, a reduction of $21.6 million (12.1%) from the level enacted in Public Law 24-14. The letter cites a slower tourism recovery, reduced air service, and broader market uncertainty behind weaker tax collections. It also suspends the 7% Solid Waste Excise Tax earmark because federal funding has been approved for operations at the Marpi Landfill, freeing approximately $1.3 million for the budget.
According to an FY2025 fourth-quarter revenue collections report, the revision recognizes $3.7 million in additional resources driven mainly by business gross revenue, wage and salary, and personal income taxes, even as other categories declined, including a steep fall in excise taxes and a 16% decrease in hotel occupancy taxes. The administration says work hours will be reduced to match available revenues while essential functions continue.
According to the administration, the plan concentrates funding on core services. The submission identifies $29 million for the NMI Settlement Fund’s Minimum Annual Payment via the proposed pension loan; $37.7 million for the Public School System ($37.1 million General Fund plus $541,597 in outside sources); $7.5 million for the Marianas Visitors Authority’s Tourism Stabilization and Recovery Plan; $7.2 million for the Group Health and Life Insurance Program; $6.2 million in Medicaid local match; and $5.8 million for Northern Marianas College. It also proposes $2 million to keep government utilities operating; $1.5 million for the Department of Finance to maintain the TylerMunis financial system and required IT; $1.7 million for the Department of Corrections; $1.13 million for fuel, communications, and supplies; and $800,000 for the Health Network medical referral program.
Two scenarios frame the fiscal outlook. With pension-loan authorization, the budget includes $5.4 million in debt service for the MPLT loan and implements a 70-hour pay period with reduced hours for law enforcement and removal of 33 NOPs under applicable procedures. General Fund support for the 25% retirees’ pension benefit is removed, with the administration anticipating $4.8 million from outside sources. Without loan authorization, the $29 million payment becomes a General Fund obligation that requires deeper reductions and deferrals; the work-hour schedule contracts to a 58-hour pay period, with law enforcement facing a 12-hour cut. Priority funding would also decrease by $3.1 million for Medicaid, $3.6 million for GHLI, $2.9 million for NMC, and $2.0 million for MVA, leaving only two quarters of direct funding for those programs. PSS would be maintained at $35.1 million inclusive of outside sources.
The submission asks lawmakers to temporarily authorize suspension of certain Personnel Service System rules, including furlough and reduction-in-force provisions, so the executive can implement austerity as needed. It redirects $541,597 from the Tobacco Settlement Expenditure Fund to PSS and allocates $67,699 each to the Rota and Tinian school districts to support instructional time. The Governor also calls for PSS and NMC to submit certified payroll registers each pay period in FY2026 to support bank transfers for personnel expenses and emphasizes that PSS appropriations should prioritize direct classroom instruction over administrative overhead, travel, or incentive programs.
The letter allocates the $1,020,000 Commonwealth Worker Fund according to the U.S. Department of Labor’s approved plan: $561,000 to Northern Marianas Technical Institute, $204,000 to Northern Marianas College, $204,000 to Registered Apprenticeship, and $51,000 for DOL administrative costs. It also reduces the Department of Public Lands to a 70-hour pay period to align with other agencies and directs lapsed-fund remittances to MPLT; the administration reports remitting $4 million in FY2025 lapsed DPL funds to MPLT’s Operations Fund.
Governor Apatang urges prompt action on revenue measures for construction tax, transient accommodations tax, and casino-license reform, as well as a timely legislative review of the revised budget and asking lawmakers to raise executive reprogramming authority to 100% so the administration can respond quickly to emergent needs.
