House, Senate trade budget riders as FY2027 funding fight nears deadline

By Eoghan Olkeriil Ngirudelsang

NGERULMUD, Palau (Sept. 28, 2026) — With the end of the fiscal year just two days away, the House of Delegates and Senate are trading competing budget provisions through amendments and bill riders as they remain divided over how to keep the government funded while work on the FY2027 budget continues.

The latest maneuvering began after the Senate on Thursday rejected House Bill No. 12-52-7S, the House’s proposed continuing budget authority act, which would have funded government operations through Dec. 31 at 25% of each agency’s prior fiscal year allocation.

The House said the temporary funding would give lawmakers additional time to review the Senate version of the FY2027 budget and continue negotiations between the two chambers.

Instead, the Senate incorporated its own six-month continuing budget proposal into a different House bill. The House then responded Monday by attaching its three-month continuing budget provisions to a Senate bill dealing with fraud.

The exchange has added another layer to an already compressed budget process, with the fiscal year ending Wednesday, Sept. 30.

The House continuing budget bill was introduced Sept. 11 by House Ways and Means Chairman Mengkur Rechelulk and Vice Chairwoman Stephanie Ngirchoimei. It passed the House on third reading Sept. 15, during the fifth day of the Seventh Special Session, and was transmitted to the Senate.

During House deliberations, Ngirchoimei said President Surangel Whipps Jr. had submitted the proposed Unified Budget for FY2027 on July 14, but the House needed additional time to work on and assess the Senate version of the budget.

Ngirchoimei said the proposed 25% funding level for the first quarter of FY2027 would equal the combined unified and supplemental budget of FY2026.

“This will serve as the temporary funding mechanism while deliberations of the 2027 budget continue,” Ngirchoimei said.

Rechelulk said the measure was intended to function as the republic’s budget for the first three months of the new fiscal year rather than simply as a temporary measure.

“This continuing budget authority is not a substitute or a temporary budgeting act; it is the republic’s budget for the next 3 months, which could be repealed when the new unified budget takes over,” Rechelulk said.

Senate rejects House approach

When the House bill reached the Senate Thursday, Senate Vice President Kuartei questioned whether a continuing budget was necessary given the time remaining before the fiscal year ends.

“There are 6 days left, so we could have done our job and passed the budget bill,” Kuartei said.

He noted that the Senate had six days and two readings to act on the budget, and questioned whether the House’s continuing budget proposal reflected an expectation that the chambers would be unable to reach agreement.

“If there really is a sense of urgency, then so be it,” Kuartei said. “But then I get the sense that the reason why there is a continuing budget authority bill sent to the Senate is perhaps there is an anticipation that we cannot compromise in 6 days.”

The Senate rejected House Bill No. 12-52-7S on first reading, preventing it from advancing to committee.

Senate creates six-month plan through rider

Although the Senate rejected the House’s three-month proposal, senators adopted their own continuing budget provisions as a rider to House Bill No. 12-4-1 HD1 SD1.

That bill extends Palau livestock funds that otherwise would lapse Oct. 1.

The Senate amendments called for a six-month continuing budget, rather than the House’s three-month plan. The Senate also included additional funding provisions.

The first amendment would provide funding to the Palau Public Utilities Corp. to offset fuel costs, as well as resources for drought preparedness, audit fees, the Council of Chiefs’ hosting of the Council of Pacific Islands Traditional Leaders conference, and transition efforts for the Belau National Hospital Authority.

A second amendment would provide funding for the Olechotel Belau Fair and Independence Day celebration, including the boat race show.

The amended bill passed unanimously, with 13 senators voting yes and two abstaining.

House answers with its own rider

The House responded Monday by using a similar legislative tactic.

During its session, the House attached its own continuing budget provisions to Senate Bill No. 12-57 SD1, legislation introduced by Whipps to expand the definition of fraud as a criminal offense.

The House amendment followed the House’s original three-month, 25% funding proposal. Unlike the Senate’s rider, it did not include most of the additional policy directives and appropriations included in the Senate’s six-month proposal.

The only overlapping provision was special funding for the Council of Chiefs to support its conference.

The House amendment passed by voice vote. On the main motion, with the amendment included, the roll call vote was 9-3-4, with nine voting yes, three no and four abstaining, for a total of 13 affirmative votes.

Two approaches, two bills

The exchange illustrates the central difference between the chambers as they work toward an FY2027 budget.

The House has proposed a three-month continuing budget at 25% of prior-year funding levels, arguing that the measure would provide time to continue reviewing and negotiating the FY2027 budget.

The Senate has rejected that approach and, through its rider, proposed a six-month continuing budget with additional targeted appropriations for utilities, drought preparedness, audits, the Council of Chiefs, the hospital transition and national events.

Each chamber has now attached its preferred funding approach to legislation originating in the other chamber.

With the fiscal year ending Sept. 30, lawmakers have two days to resolve the competing provisions and establish funding authority for government operations while the FY2027 budget remains unresolved, which could shut down the government if no budget is passed by the end of September 30, 2026.