Legislators press finance on revised FY2026 budget and $3.7 million in prior‑year receipts
October 22, 2025 | House, Northern Mariana Legislative Sessions, Northern Mariana Islands
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Chairman JP Sablan and members of a joint Ways and Means and Senate Fiscal Affairs committee on Oct. 13 questioned the administration’s revised fiscal year 2026 budget submission over whether cash collected at the end of FY2025 should be counted as available for FY2026 appropriation.
Madam Secretary of Finance (identified in testimony as the secretary of finance, administration, Narita) told the committee the administration’s revised submission reflects updated fourth‑quarter collections and other adjustments that increased gross revenues available for appropriation. The package submitted to the Legislature lists two scenarios: one that assumes a secured MPLT loan and one without the loan. The administration’s Scenario 1, with the loan, reported roughly $138.4 million in net available resources and would allow restoration of paid holidays and a $37.7 million allocation for public schools, the secretary said.
Members focused on a $3.7 million amount identified in the FY2025 closing report that the administration is proposing to appropriate as part of FY2026. Counsel and the committee’s budget adviser both said the committee needs documentation and accounting entries to determine whether the collections meet modified‑accrual criteria and the Planning and Budgeting Act’s rules for revenue recognition. Dave Dimapan, speaking as the committee’s fiscal adviser, reminded lawmakers the modified‑accrual test requires revenue be both measurable and available (the “60‑day” availability test) and asked for receipts and accounting entries supporting the $3.7 million.
Committee members and counsel offered differing procedural views in public remarks. Counsel Joe Bermudez said his reading would treat the receipts as FY2026 resources because the FY2025 budget is closed; the fiscal adviser said the committee should verify when the receipts were recorded and how they were posted before deciding whether those funds were legitimately available for FY2026 appropriation. The secretary referenced attachment A (the fourth‑quarter cumulative report attached to the governor’s transmittal) and attachment B (the FY2026 projection) and said the administration included the $3.7 million to provide the Legislature transparency about funds it believes to be available.
Lawmakers directed a formal information request to the secretary. The joint committee asked for: (1) the accounting entries that recorded the $3.7 million, (2) a breakdown of the revenue types making up the amount, and (3) copies of receipts or deposit records proving the collections occurred in FY2025. The committee indicated it will withhold final judgment on whether the amount should be treated as FY2026 available revenue until it receives those materials and counsel’s further guidance.
Separately, several members pressed the administration about the broader two‑scenario approach. The secretary and OMB staff said Scenario 1 (with the MPLT loan) offers more flexibility to avoid deeper cuts, while Scenario 2 (without the loan) would require steeper reductions in services and staffing. The administration asked the Legislature for statutory authority and cooperation for actions connected to the MPLT/MPOT loan framework and said it had already identified additional internal austerity measures (e.g., reduced hours) if the loan did not proceed.
The committee did not take a final vote on the revised budget during the hearing; members instead recorded formal requests for documentation and signaled they would consider the administration’s scenarios after reviewing the requested accounting evidence.
Ending
The joint committee recessed to review the materials the administration promised to provide. The committee’s next steps include receipt and audit of the $3.7 million supporting documents, counsel and fiscal adviser review of legal accounting treatment, and follow‑up questions on the two scenarios tied to the MPLT loan before any appropriation action.
Madam Secretary of Finance (identified in testimony as the secretary of finance, administration, Narita) told the committee the administration’s revised submission reflects updated fourth‑quarter collections and other adjustments that increased gross revenues available for appropriation. The package submitted to the Legislature lists two scenarios: one that assumes a secured MPLT loan and one without the loan. The administration’s Scenario 1, with the loan, reported roughly $138.4 million in net available resources and would allow restoration of paid holidays and a $37.7 million allocation for public schools, the secretary said.
Members focused on a $3.7 million amount identified in the FY2025 closing report that the administration is proposing to appropriate as part of FY2026. Counsel and the committee’s budget adviser both said the committee needs documentation and accounting entries to determine whether the collections meet modified‑accrual criteria and the Planning and Budgeting Act’s rules for revenue recognition. Dave Dimapan, speaking as the committee’s fiscal adviser, reminded lawmakers the modified‑accrual test requires revenue be both measurable and available (the “60‑day” availability test) and asked for receipts and accounting entries supporting the $3.7 million.
Committee members and counsel offered differing procedural views in public remarks. Counsel Joe Bermudez said his reading would treat the receipts as FY2026 resources because the FY2025 budget is closed; the fiscal adviser said the committee should verify when the receipts were recorded and how they were posted before deciding whether those funds were legitimately available for FY2026 appropriation. The secretary referenced attachment A (the fourth‑quarter cumulative report attached to the governor’s transmittal) and attachment B (the FY2026 projection) and said the administration included the $3.7 million to provide the Legislature transparency about funds it believes to be available.
Lawmakers directed a formal information request to the secretary. The joint committee asked for: (1) the accounting entries that recorded the $3.7 million, (2) a breakdown of the revenue types making up the amount, and (3) copies of receipts or deposit records proving the collections occurred in FY2025. The committee indicated it will withhold final judgment on whether the amount should be treated as FY2026 available revenue until it receives those materials and counsel’s further guidance.
Separately, several members pressed the administration about the broader two‑scenario approach. The secretary and OMB staff said Scenario 1 (with the MPLT loan) offers more flexibility to avoid deeper cuts, while Scenario 2 (without the loan) would require steeper reductions in services and staffing. The administration asked the Legislature for statutory authority and cooperation for actions connected to the MPLT/MPOT loan framework and said it had already identified additional internal austerity measures (e.g., reduced hours) if the loan did not proceed.
The committee did not take a final vote on the revised budget during the hearing; members instead recorded formal requests for documentation and signaled they would consider the administration’s scenarios after reviewing the requested accounting evidence.
Ending
The joint committee recessed to review the materials the administration promised to provide. The committee’s next steps include receipt and audit of the $3.7 million supporting documents, counsel and fiscal adviser review of legal accounting treatment, and follow‑up questions on the two scenarios tied to the MPLT loan before any appropriation action.
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