By: Eoghan Olkeriil Ngirudelsang

Koror, Palau — The Palau Senate unanimously rejected the proposed fiscal year 2025 budget, voting 12-0 against it after expressing dissatisfaction with amendments and funding adjustments made by the House of Delegates. The Senate’s vote occurred three days ago.

The rejected Senate Bill 11-111 SD4 HD5 authorized $134.6 million and appropriated $129.4 million. It also contained policy provisions for restructuring National Development Bank of Palau (NDBP) loans, establishing an aircraft registry, and requiring the Election Commission to set up central polling places for the upcoming general election.

House amendments removed $300,000 intended for equipping the Senate chambers to accommodate two additional senators, who will join the legislature in the next government. The House also increased its legal counsel’s budget and boosted the Office of the Public Auditor’s budget by $200,000. Additionally, it withdrew $3 million allocated for Hawaii’s medical referral housing and increased Social Security benefits payments from $2 million to $3 million. The $3 million originally set aside for Hawaii’s referral housing became available after securing $20 million for the pension plan, which freed up national budget funds.

The House also proposed around $1.5 million for state capital improvement projects (CIP), including $50,000 for fuel costs for outlying states, $200,000 for Aimeliik State road construction, $50,000 for Ngatpang State’s master plan, $35,000 for Angaur State’s tractor equipment, and $100,000 for Airai State road work. Additional CIP funds included $23,000 for Hatohobei State’s solar system, $40,000 for Kayangel State’s youth programs and center, and $250,000 for Koror State’s solid waste program.

Several other appropriations were included, such as:

• $50,000 for Melekeok Public Land Authority
• $378,500 for Ngaraard-Ngkeklau water line
• $50,000 for Ngchesar Public Land Authority
• $40,000 for Ngerchelong dock improvement
• $35,000 for Ngaremlengui fish market and gas station
• $90,000 for Ngiwal Imekang port improvements
• $15,000 for Sonsorol’s constitutional convention
• $60,000 for Peleliu boat maintenance and ramp upgrades

During the Senate session, Senator Inabo argued that given the government’s transition next year, only a standard budget should be passed, allowing the incoming administration to address specific CIP projects. Senator Eldebechel called for supporting documentation from the states to justify their project priorities, particularly in an election year. Senator Mariur recommended rejecting the budget bill with the House’s amendments and forming a conference committee to resolve differences.

With less than two weeks remaining until the end of the fiscal year, both houses must reach a compromise or face a potential government shutdown due to the lack of an approved budget. If no agreement is reached, the Olbiil Era Kelulau (OEK) may have to pass a continuing budget to keep government operations running.