KOROR, Palau—The Koror State Legislature has proposed a $10.9 million budget for fiscal year 2024, which would replace the Interim Budget beginning in April this year.
The spending plan authorizes $10,935,000 but appropriates $10,655,000. The difference reflects anticipated revenue that may not be fully realized.
The funding sources include a $2.5 million national block grant, $5.393 million from local revenue sources, and $3.037 million from savings reserve funds. The continued use of savings to supplement the budget has raised concerns about long-term fiscal sustainability.
In a significant change from previous years, the proposed budget for hamlet CIPs is no longer directly under the Legislature’s budget but a separate item. The budget bill allocates $25,000 each to the state’s 12 hamlets for capital improvement projects (CIPs). These funds will be separate from the legislature’s budget, with lawmakers deciding which hamlet projects to implement.
The proposal also establishes a new requirement for building permit fees. Construction contracts exceeding $20,000 will now require a bid bond equal to 20% of the bid amount.
Koror State has reportedly sought loans from the national government to address ongoing budget shortfalls and prevent the depletion of its reserve savings fund, which could occur as early as 2025 if left unchecked.
Disagreements surrounding the formulation of this budget bill recently led to a reorganization of the Koror State Legislature.