Board of Education declares fiscal emergency

BOARD MEETING: The Board of Education met for more than seven hours Wednesday to discuss an austerity plan to reduce the impact of the economic slowdown on public education. Photo courtesy of Marianas Variety

SAIPAN – The Board of Education on Wednesday declared a fiscal state of emergency for the Public School System.

The board's five elected members – Chairwoman Janice Tenorio, Vice Chairman Herman Atalig, Philip Mendiola-Long, Andrew Orsini and MaryLou Ada – voted unanimously to declare an emergency.

Citing the financial situation of PSS, Mendiola-Long said the school system cannot operate because it can't collect its allotments from the central government.

"At this point, in order to have a proper discussion with federal agencies, the U.S. Department of Education as well as with the Legislature and the governor's office, they need to know how severe of a situation or crisis we are in," he said. "PSS is way past free fall; we can see the ground."

He said the No. 1 priority is the teachers and administrative staff.

"But we don't have enough money to do anything else, or enough money for our teachers."

By declaring a state of emergency, he said the board and PSS are notifying the Legislature and governor's office "so that they understand that when they pass the budget."

"It is also a notice to the federal government and all our federal grantee agencies, whether it's USDA, or the U.S. Department of Education, that we are in a state of emergency and we have payroll issues," he said.

Cuts to pay, raises

PSS finance director Christopher Ching said his department is expecting a $700,000 biweekly allocation from the central government, but PSS needs $1.4 million for each payroll.

Tenorio, Mendiola-Long, Atalig and Orsini on Wednesday approved a pay cut affecting 660 employees from June 19 to Sept. 19.

PSS will also implement a 50% reduction in salary increases provided by a compensation plan that took effect on Oct. 1, 2017.

Ching said the pay cuts may result in potential savings of $695,722.96 for the remaining period of the fiscal year, which ends on Sept. 30.

He noted that employees earning less than $23,660 annually are not included in the pay cuts.

"We don't have money for CUC," Mendiola-Long said in an interview. "We don't have money for medical insurance. We don't have money for any operational cost. I was trying to explain to the board that it is strictly a cash flow situation. How much cash do we have and what can we pay?"

He added that the board's decision focused on the teachers. "Unfortunately, we couldn't protect them at their current salary levels. So you have to adjust the salary levels. The administration is taking a huge gamble that they're going to be able to fund the shortage, which is $800,000 per month."