President Tommy E. Remengesau Jr, has signed into law the fiscal year 2018 budget that authorized $91,116,414 and appropriated $85,914,414 for the annual governmental operations, special revenue, and debt service. Remengesau signed the spending legislation yesterday in the new conference at the president's satellite office in Meyuns.
The bill cleared Obit Era Kelulau with only slight disagreement between the two houses and also with the president. Remengesau signed the budget measure that included major spending policies consistent to what he calls a "caring government." After two years of appropriating funds $1.6 million annually to cover the $50 increase to monthly benefits of retirees, the budget law provides a permanent financing by an additional one percent increase to the social security tax for the employer and employee.
It also removed the maximum remuneration so that every income earned over $24,000 is subjected to the social security tax. Responding to the concerns of the business community, Remengesau stressed that while it is expected to have an impact on employees and employers, the long-term benefits are expected to outweigh this burden. Remengesau said that the burden is going to be very minimal on low-income earners, especially those who make less than $24,000 per year. "The bulk of the burden will be absorbed by high income earners," the president stated in signing the budget measure. In signing the bill, the president also line-item reduced two budget activities.
An amount of $1,150,000 appropriated by the Olbiil Era Kelulau to stop the financial bleeding by the Civil Service Pension Plan was reduced $1 million. The remaining $150,000 will finance an actuarial study.
Remengesau said that the initial understanding with OEK is to appropriate funding for actuarial study. He is also way of "committing almost 100 percent of the projected fiscal year 2018 fund availability for this budget bill, along with an additional $4.4 million being authorized," will the government in a difficult position to manage funds.
These include budget items such as subsidies to PPUC, funding support to NDBP, procurement of new financial management system, Pacific Catastrophe Risk Assessment and Financing Initiative insurance payments, ADB contingent line of credit maintenance fee President Remengesau also item reduced House of Delegates budget by $100,000 down to $2,790,500.
An amount of $1,600,000 was provided to subsidize water and sewer improvement operations of PPUC. The budget law also prohibited PPUC from increasing any tariffs on utilities until after January 31, 2018. Also $200,000 is appropriated for a permanent subsidy program for electrical, power, and wastewater consumption for fixed and low income house-hold PPUC customers.