Koror State Capitol

Koror State government FY 2020 Annual Unified budget authorized $12.4 million but appropriated $10.3 million, about a 16% reduction of the authorized budget. The original budget submitted by Governor Gibbons was $14.9 million making the overall reduction of his submitted budget down 30% or nearly $4.6 million budget cut.

“While we were working on the budget, the corona virus outbreak happened. We anticipated that it will have an impact on projected income especially with tourism fees as the biggest component of generated revenue. February is the highest season for Chinese visitors, we expect our tourism income to go down and we made a decision to cut the budget,” reported Legislator KyonoriTellames, Chairman of Ways & Means of Koror State Legislature.

The total projected generated income for Koror State, based on their approved budget, is $7.4 million, not including block grants and reserved savings of $4.9 million.  Of that projected income of $7.4 million, nearly half  or$4 million comes from Jellyfish and Rock Island Use fees.

“We authorized $12.4 million and appropriated $10.3 million for this fiscal year. We can still appropriate funding later when we are assured of the funding source,” added Tellames in response to the concerns raised by Governor Franco Gibbons in his transmittal letter to Speaker Marbou on the budget.

In a letter addressed to KSL Speaker Alan Marbou, Governor Gibbons expressed that he had signed the budget bill into law but decried the cut in the budget saying the reduction from the FY 2019 budget of $15 million down to $10 million is drastic, a 30% decrease over last year’s budget.

Furthermore, he said, he was given only one day to consider the bill before the continuing budget was to run out and therefore did not have time to consult with his personnel about potential budget shortfalls.  He cited the cut to the Department of Conservation & Law Enforcement budget of $2.057 million down to $1.7 million, a reduction of $293,445 as significant and said will affect improvements of facilities in the Rock Islands.

“In August, I sent a letter to the Office of Governor asking them to submit a budget so that we can have time to properly entertain it, conduct hearings and oversights on it and we did not get anything from them.  We were told that they want to wait until the end of the year to get a clear picture of revenue and expenditures.  This is the 3rd year that we have to operate on a continuing budget,” revealed Ways & Means Chairman Tellames.

According to Chairman Tellames, Governor’s Office submitted a 3-month continuing budget in December.  “We gave them one month under the continuing budget and we asked that they submit a budget as soon as possible.  They submitted the budget on the 14th of January.  We had to conduct due diligence review, conduct hearings with all departments, HOTL, boards, and commissions and after the hearings, we had to go through the process, the second reading, and final reading, and we had to do this within 2 weeks time,” added Tellames.

On the budget cut for Rock Island capital improvement funds, Tellames said that they actually did the Office of the Governor a favor.  “Each year, the budget for Rock Island improvements and law enforcement comes from revenue generated from the rock island fees.  They have to work based on funds availability and as a result, they don’t get to complete or start some of the projects because of funds availability issues.  The state block has not been appropriated and it’s guaranteed revenue.  After they put together project plans, cost estimates and submit their requests, we can appropriate that fund for those projects.  They will not need to wait for rock island fees to be available in order to get started.”

Governor Gibbons in his transmittal letter contested the budget item that placed the hamlet projects under the legislature’s direct management as unconstitutional, an encroachment of executive powers.

Speaker Marbou expressed in an interview that Koror State Constitution is different in that it gives broader mandates in addition to lawmaking authority to the legislature.

Legislator Tellames revealed that the request came from all the legislators because this past year, there were no projects in their hamlets.  “Just because it is under the legislature, does not mean that we will evade procurement laws.  Right now, even if the legislature is to purchase a vehicle, it must comply with procurement laws.  This too will comply with all procurement requirements.”

“Constituents from different hamlets are after their hamlet legislators on small improvement issues from speed bumps to other improvements that are of importance to those hamlet residents.,” added Tellames.

Speaker Marbou stated that they are always open to discussing budget concerns or any other concerns with Governor Gibbons.  “He mentioned that he will be sending us his recommendations and we are waiting for him,” stated Marbou.

When asked, given the unknown timeline and outcome of the corona virus, if Koror State is able to cover operating expenses until such time the flights are resumed, Chairman KyonoriTellames affirmed that Koror State government have cash on hand to cover operating expenses under the current budget. (L.N. Reklai)