President Surangel Whipps Jr. proposed to expand the 75 cents wage increase to state government employees in the national budget for FY 2023.  The original budget submittal only covered the national government employees under the National Civil Service System.

In a letter to Senate President Hokkons Baules and House Speaker Sabino Anastacio, Whipps proposes expanding the 75 cents per hour wage increase to state government employees and government exempt employees.

The proposal would increase President’s original budget by an additional $1,626,121.  Whipps said this would “impact 2,254 permanent employees of the civil service system and 591 exempt employees.” 

The request did not include the additional $1.6 million funding source, although the original budget proposal identified local revenues as the source of funds.

Whipps also forwarded Palau Community College’s request to be included in the wage increase, seeking an additional $232,440 to cover its 158 employees.

Meanwhile, the bill has passed the final reading in the Senate and 2nd reading in the House.  The Senate version passed on August 31st increased the budget bill by $2.525 million, which did not consider this additional request. 

The bill is now before the House of Delegates, pending 3rd reading.  The House HD1 version reduced the Senate version down to $93,929,000, citing the need to employ “conservative management and savings practices.”

“W&M believes that the changes represent sound institutional practices and create a strong fiscal budget for the coming year.  The Fund Availability Analysis (FAA) transmitted by the President appears to be sound, and W&M observed that the Republic of Palau’s economic future depends on prioritizing wise investments, funding allocations, and employing conservative management and savings practices.”

Some additions removed by the House of Delegates include $25,000 for the Palau National Youth Council, $310,000 to the National Scholarship Fund, $100,000 to the Bureau of Customs and Border Protection, $50,000 for the Vice President’s legal council and public information office, and others.

House kept the proposed $115,000 comprehensive study on Palau’s Hemodialysis program and the additional $200,000 for Senate and House of Delegates budgets.  The increase to both houses’ budgets is said to be similar to this fiscal year. 

“Both the Senate and House of Delegates have worked diligently to maintain the integrity of their operations during the fiscal year in a cost-effective manner; nonetheless, the amount proposed in the SB 11-70, SD6 was necessary to fulfill their constitutional mandates,”  House W&M justified.

President Whipps’s letter said that $5,125,121 million to fund the wage increase is enough to pay the employer’s share of Social Security, Pension Plan, and NHI if applicable.

Given the budgetary constraints, both houses will be looking at which program or agency’s budgets to cut and which financial sources can still be tapped to fund the wage increase to state governments. 

Semiautonomous government agencies that are not receiving appropriations from the government are not included in the wage increase proposal, according to Senate Ways & Means Committee Chairwoman Senator Rukebai Inabo.

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