May 31, 2009 — Financial challenges brought on by the national economic slowdown have delayed by a little more than three weeks the submission of the governor's fiscal year 2010 budget, which by law was due to the Senate on Saturday.
Discussions on how federal economic-stimulus funds can be used are ongoing, and the government is still working to finalize loans that may be taken out in hopes of bridging the current $188 million budget shortfall, Gov. John deJongh Jr. recently wrote in a letter to Senate President Louis. P. Hill.
Last week, senators passed a bill authorizing the governor to borrow up to $200 million from public fund accounts and, if needed, turn to the banks for a line of credit or other form of short-term financing that would help provide the capital needed to cover critical operating costs during both FY 2009 and FY 2010. The government anticipates using both options — taking about $50 million in local funds and borrowing about $150 million from a bank or other financial institution — to cover the projected shortfalls, members of the governor's financial team have said. (See "'Borrowing Bill' Passed By Senate.")
Meanwhile, the government has continued to lobby the U.S. Education and Interior departments for greater flexibility in how the territory will spend about $67 million in State Fiscal Stabilization Funds authorized under the American Recovery and Reinvestment Act (ARRA). The money is not expected to come into the territory before August, while guidelines on how it can be spent won't be out until mid-to-late June or even mid-July, the governor said.
"As you are aware, the dramatic decline in our territorial revenues caused by the global financial and economic crisis continues to present challenges to our government and our people throughout the territory," deJongh said in his letter to Hill. "I believe that the budget contingencies and economic-stabilization measures that we continue to develop will enable us to ensure that we provide the essential government services our people need, but this continuing process has caused a delay in the submission of the FY 2010 executive budget."
The budget will be submitted to the Senate by June 26, the governor said. Local law requires the budget be delivered by May 30.
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