Overview:
Palau could begin fiscal year 2027 under another three-month Continuing Budget Authority. The House of Delegates has proposed temporary funding through Dec. 31, despite receiving the Senate version of the FY 2027 budget on Aug. 21 and with only 15 days remaining before the new fiscal year.
By: L.N. Reklai
KOROR, Palau — Palau could enter another continuing budget period this year after the House of Delegates proposed temporary funding for the first three months of fiscal year 2027, despite having received the Senate version of the annual budget on Aug. 21.
House Bill 12-52-75, introduced Sept. 11, would authorize continuing budget funding from Oct. 1 through Dec. 31, 2026, at an amount not to exceed 25% of the fiscal year 2026 budget, RPPL 12-3 as amended.
The proposal comes with just 15 days remaining before the start of the new fiscal year.
The House of Delegates is responsible for the FY 2027 budget process this year. According to sources, the House received the Senate’s version of the budget on Aug. 21 but has now proposed moving forward with a Continuing Budget Authority, or CBA.
Palau law provides that if an annual budget has not been enacted by the beginning of a fiscal year, a continuing budget authority may be enacted to fund regular government activities at the previous year’s appropriation levels until a new annual budget is enacted.
The proposed CBA would cover several payments and government obligations, including supplemental Social Security benefits, subsidies for the Palau Public Utilities Corp. and payments to retirees and people with disabilities.
However, the proposed continuing budget removes some items included in the previous budget plan. Among them are $100,000 earmarked for the acquisition of counternarcotics equipment and $250,000 for the Solid Waste Management Office.
The bill also proposes a $100,000 appropriation for the Olchotel Belau Fair, of which $45,000 is for the Independence Day Boat Race.
The development echoes last year’s budget process, when Palau also faced the possibility of a government shutdown as lawmakers worked to resolve differences over the fiscal year 2026 budget. President Surangel Whipps Jr. issued a government shutdown notice at the time before the Senate and House reached a compromise and enacted the budget at the last minute.
The Senate was responsible for the FY 2026 budget process. This year, that responsibility falls to the House of Delegates.
The Olbiil Era Kelulau’s current legislative records show the FY 2027 budget originated as Senate Bill 12-73 and passed second reading with a Senate draft amendment on Aug. 20.
The House’s proposed CBA means lawmakers could begin FY 2027 under temporary funding rather than an enacted annual budget unless the FY 2027 budget is completed before Oct. 1.
President Whipps says his “goal remains a full budget. We understand the House has advanced a Continuing Budget resolution as a precaution in case more time is needed, and we respect that as a responsible contingency. That said, the President’s preference is still to see a full, balanced budget passed rather than rely on a Continuing Budget, which can delay programs and cap spending at last year’s levels. We’re hopeful that with cooperation across both chambers, a full budget can still be finalized in time.”