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No Meeting of Minds in Lump-Sum Budget Debate

July 2, 2004 – Echoing the comments of Finance Commissioner Bernice Turnbull and Internal Revenue Bureau director Louis Willis, who testified earlier in the day, Ira Mills, director of the Office of Management and Budget, asked the Senate Finance Committee on Friday to continue giving lump-sum budgets to all departments and agencies.
Mills told the Finance Committee chair, Sen. Adlah "Foncie" Donastorg, that lump-sum budgets rather than line-item budgets bring efficiency to government.
"With a lump-sum budget you produce more when you have less," Mills said in an impassioned speech directed to the senator. Commissioners and department heads can move money around as needed, he said, and they can keep tabs on salary costs.
"It puts them in a better position to plan," Mills said.
But Donastorg wasn't buying Mills' argument. He said lump-sum budgets allow commissioners and department heads to spend based on whoever yells loudest for the money. "If a contractor screams loud enough, he becomes a priority," Donastorg said.
And, he said, by approving lump-sum budgets, the Legislature was ignoring the need for checks and balances in spending.
Mills said three of the last four budgets were lump sum.
And as a result, Donastorg said, the territory is in a such a precarious fiscal position that the specter looms of a federally appointed chief financial officer or a local financial control board.
Donastorg also pointed out that the current administration has borrowed more money than any other.
Mills countered that the money was borrowed to pay off past debts to vendors and past-due income-tax refunds, among other things. He said lump-sum budgets are preventing a recurrence of such problems.
"We are in the position of dealing with the current and addressing the ills of the past," Mills said. Because the government paid its past-due bills to contractors, he said, those contractors remain in business and continue to pay taxes. And those taxes support the government, he said.

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