THE Senate version of House Bill 24-46 now goes to the desk of Gov. David M. Apatang after the House of Representatives unanimously passed the fiscal year 2026 spending measure on Saturday, four days before the start of the new fiscal year on Oct. 1, 2025.
The bill identifies $179 million in budgetary resources but makes only $127 million available for appropriations.
All House members present voted for H.B. 24-46, authored by Rep. John Paul P. Sablan. House Floor Leader Marissa Flores and Rep. Elias Rangamar were excused.
On Friday night, the Senate unanimously passed a substitute version offered by Sen. Jude U. Hofschneider, chair of the Senate Fiscal Affairs Committee. The amendments, however, did not change the projected revenue or the amount available for appropriation.
The amendments contained mostly administrative provisions, including reserving Office of Grants Management funds, covering health and life insurance, funding 25% of the CNMI retirees’ pensions, and allocating $210,000 of the $2.7 million settlement with the defunct Imperial Pacific International for the Commonwealth Casino Commissioners.
All eight senators present voted to pass the amended version of H.B. 24-46. Sen. Celina R. Babauta was excused.
Senate President Karl King-Nabors said once the governor signs the new budget, the Legislature will need to develop a revised budget “as soon as possible.”
In an interview after the session, King-Nabors explained that the Legislature did not have sufficient time to address the concerns raised by the governor earlier last week regarding budget cuts. “We needed to go through every allocation, understand the salaries, wages, and benefits of all employees, and make the necessary adjustments. That was a task beyond our ability given the time constraints,” King-Nabors said.
He added that the House would pass the Senate version of the budget since many of the amendments were already agreed upon. “The budget bill will go to the governor, then we will reconvene with the administration to understand how all of these reductions will transpire,” King-Nabors said.
Prior to the House vote, Sablan told members to consider the Commonwealth’s financial condition outlined by the administration just days ago. “The reason this budget does not immediately reflect the governor’s message reducing revenue projections to $156 million is simple: we must be deliberate. We must measure three times and cut once. Acting without planning would be irresponsible. We cannot cut the Judiciary, Public School System, or executive branch further without consultation from stakeholders,” he said.
He emphasized that the inputs required for informed decision-making were not available in the few days before finalizing the budget. “What we can and must do is prepare better for the next round of adjustments, so reductions are made with careful analysis and participation from those directly affected,” Sablan said.
He stressed the need for “equitable reforms and reasonable austerity measures” that reflect the size and core functions of each branch. “If there are cuts to be made in order to rightsize, they must be strategic — targeting only what is truly excess, not where they would cripple essential services,” he said.
He noted that the Legislature has fewer than 30 employees serving 29 members — less than 60 people total. “This branch cannot afford to cut six employees without crippling its ability to function,” he said.
PSS funding
Sablan also highlighted funding for the Public School System, which will receive $31.9 million.
According to the CNMI Constitution, PSS “shall be guaranteed an annual budget of not less than twenty-five percent of the general revenues of the Commonwealth through an annual appropriation.”
If general revenues amount to $179 million, then 25% of that is $44.75 million.
“While some may call for 25% of gross revenues, we cannot afford that today. Our duty is to balance the budget and protect government stability,” Sablan said.
He added that PSS must manage resources efficiently. “We cannot afford a top-heavy central management structure at the expense of instructional days. Our children should never be used as political pawns in a budget debate. It is unrealistic to demand $49 million when every branch of government is being asked to reduce,” he said, referring to PSS’ original budget request.
Sablan noted that cost-saving measures, such as travel bans, should be implemented during the summer, not after classes begin. “The games must end,” he said. He reiterated that the focus must remain on protecting instructional time and serving the needs of students. “This budget prioritizes teachers and school staff over central management. We have put students first,” he said.
“By passing this budget today, the Legislature has acted to keep the government open, schools funded, and essential services running. At the same time, we remain committed to working with the administration to carefully review and realign this budget responsibly,” Sablan added.
He acknowledged the fiscal realities of a tourism-dependent economy and stressed that rightsizing government would be necessary. “These decisions will not be easy, but they are essential to sustaining a government that lives within its means. We must also strengthen the Marianas Visitors Authority because tourism remains our primary economic engine,” he said.
As for the Marianas Public Land Trust’s $29 million loan to the government, Sablan said: “Ideally, we would not need to borrow money to help pay for retirees, but in this difficult economy, we may have to do so one last time to get through these challenges.”
He said CNMI leaders must avoid repeating fiscal challenges and focus on sustainable reforms and prudent financial management.
“This budget represents responsibility in the face of challenge. We have done our part to keep the government open, schools funded, and our people served,” Sablan reiterated.
For his part, Speaker Edmund S. Villagomez said, “This is not the final product. I know the work continues, but with collaboration, we have met the deadline and taken a significant step toward a fair and balanced budget.”
Failure to enact a new balanced budget law by Oct. 1, 2025 will result in a partial government shutdown.
House Ways and Means Committee Chair John Paul Sablan delivers his remarks during a House session on Saturday.
Senate Fiscal Affairs Chair Jude U. Hofschneider offers a substitute version of the budget bill.
Photo by Emmanuel T. Erediano
Senate President Karl King-Nabors speaks during a Senate session on Friday night.
Photo by Emmanuel T. Erediano
