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President Mori Submits $53 Million Proposed Budget for FY 2011 to Congress

Palikir, Pohnpei (Office of SBOC): April 9, 2010 - On April 1, 2010, Vice President Alik Alik, on behalf of President Emanuel Mori, transmitted to Congress a $53 Million Proposed Budget of the FSM National Government for Fiscal Year 2011. Of the total, $39 million will come from domestic revenue and $14 million from other sources, including Compact grants and other foreign aids.

In a very detailed 10-page transmittal letter, the President noted that the budget "lies at the heart of our efforts to manage the overall national economy. Individuals, communities, businesses and the state governments rely on the national government for critical services and functions - from helping to create employment and income opportunities to financing the education of their children, to ensuring that all citizens have access to affordable and sustainable retirement programs and health insurance, to protecting the environment and public safety."

The President further indicated that the FY 2011 budget proposal calls for major reforms by shifting the overall focus and resource allocation from general operations and taking serious actions on issues that have been neglected for far too long, such as capital formation through investment in private sector development and human capital, physical infrastructure, as well as long-term savings and investment. The President also noted that the 2011 Budget continues to move the National Government towards a performance budgeting format, which will focus decision-making on actual performance.

While holding operational expenditures to a slight increase, the budget proposes a $14.60 million investment in capital and human resources development for FY 2011, an increase of $3.67 million or 34% over the current FY 10 budget. The budget also proposes a $9.49 million budget for 'grants, subsidies and contributions', an increase of $4.16 million, or 78%, over the FY 2010 level of $5.33 million.

Top funding priorities in the FY 2011 budget include: $5.14 million for the College of Micronesia - FSM; $4.91 million for capital improvement programs; $2.0 million to subsidize and strengthen the FSM Social Security program; $1.5 million to capitalize the FSM Trust Fund; $1.5 million to finance the Scholarship Fund; $1.0 million to develop financial institutions, $600,000 to assist non-public schools, and $500,000 to capitalize a new National Employee Pension Plan.

The Operations Budget of $28,949,713 for the three branches (Executive, Legislative, and Judiciary), the Public Auditor's Office, all national agencies, boards and commissions represents a 7% increase or approximately $1.9 million over the Fiscal Year 2010 operations budget.

As in the past, the proposed budget represents a balanced budget, matching $53,044,445 in projected revenues to the proposed total expenditure of $53,044,445. The projected revenues for FY 2011 were conservatively estimated after a careful analysis of audited financial statements since 2006, and the actual and revised projections for 2009 and 2010, to ensure a strong financial base for the coming fiscal year. The forecast also took into account outlook of the economy for the next two years.

In anticipation of the huge task of finalizing this budget for the coming year, the President expressed his appreciation to Speaker Figir and the Members of Congress, and stated, "I am once again seeking your cooperation to work together to reach agreement on an appropriate level of resource allocation that provides for essential government services, and one that our citizens and stakeholders deserve."