Mon. Dec 9th, 2019

President signs $97.022 million FY 2020 Unified Budget Act

Palau President Tommy Remengesau, Jr. told the media that Palau shares the sentiment of other Pacific nations that Australia as “a big brother, can do more than what they are currently doing.”

Item vetoed $25K from each state block grant, allowed public entities subsidies

President Tommy E. Remengesau Jr. signed the FY 2020 Unified Budget into law on Wednesday, a mere 8 working days before the end of the fiscal year.  There was no fear of shut down as President agreed with law makers on many of the items in the budget than he disagreed.

Remengesau had earlier submitted a $92.9-million-dollar budget proposal which is about $5 million dollar less than what was just signed into law this week.  The initial budget he proposed appropriated $92.9 million out of estimated projected revenue for FY 2020 of $96 million.

The initial bill projected a 2.9% growth over FY 2019, citing anticipated growth due to “expanded construction projects, increased spending and resumption of regularly direct flights to and from Japan.”

In signing the bill into law, Remengesau noted that new developments associated with global uncertainties such as the trade war between United States and China and the bombing of the oil fields in Saudi now pushes Palau to position itself in case global economic conditions further deteriorate, impacting our local economy.

Remengesau item-vetoed half of the $800,000 dollars that OEK had added to the budget for State governments block grants but he did not touch the subsidies of nearly $5 million dollars OEK put into the budget to subsidize Pension Plan and Palau Public Utilities Corporation.

In his transmittal letter, he only urged OEK to look at more long term solutions to the problem of the Pension Plan and rising cost of power by PPUC.  OEK had included $2.1 million to subsidize PPUC and $3 million to subsidize the failing Pension Plan.

He urged the lawmakers to find solutions for “long term sustainability” of both PPUC and Pension Plan, saying that “subsidies in form of funding support” for these public entities present a “real risk to our long-term fiscal sustainability.”

In addition to funding FY 2020 government and state operations, RPPL 10-42 amended 13 PNC designating Ngardmau Dock as a national port.

Furthermore, it amended 40 PNC to allow deduction of up to $5,000 of each foreign salary from gross revenue before payment of gross receipt taxes. (By L.N. Reklai)