State block grants were restored in the FY 2022 budget version after 2nd reading in the House of Delegate (OEK) this week.  It added $800K to the budget restoring back $50,000 deducted from each state previous block grant.

The House said that without the additional funding states will be “unable to provide essential services and maintain their workforce, potentially leaving many of our citizens without income needed to survive.”

Funding source for the increase in state block grant according to House Ways & Means Committee report is expected to come from expected savings from this FY 2021 operation as well as “projected remaining unappropriated funds”.  Report states that “Minister of Finance hinted, and we perceive it to be, that there will be funds available to meet any increase to the FY 2022 budget.”

House of Delegates also restored outlying states transportation appropriation of $90,000, divided equally between Kayangel State, Angaur State and Peleliu Marine Transportation Authority.  Source of funding for this appropriation is said to come from General Fund Reserve.

The bill as passed in the 2nd reading amended SS Supplemental Benefit limiting surviving spouse beneficiaries from getting their deceased spouses’ payment, only their own supplemental benefit payment.  People still working are also restricted from getting the SS Supplemental Benefit Payment.

The bill also amended retirement age for government employees to 65 years old but give the employee an opportunity to retire when he or she reaches 60 years of age or continue to work he or she reaches 65 years of age.

The conservative budget bill was put forth by President Surangel Whipps Jr. in July with certain budget items reduced compared to previous year.  This was in in lieu of expected reduction of revenue as result of the ongoing COVID-19 pandemic impact. 

Original budget submitted by President Whipps authorized $89.2 million and appropriated $82.5 million.  House version after 2nd reading increases the budget by $890k.  The bill still need to go through 3rd reading in the House and 3 readings in the Senate.

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