June 13, 2007

The Kaselehlie Press

Perhaps no one knows better that Kosrae needs to tighten its financial belt if they are going to solve the financial problems with which they are faced than Governor Robert Weilbacher. That was the subject of a Leadership Conference in Kosrae on May 29 and 30.

Former Governor Rinsley Sigrah showed up for the meetings but didn't stay long though no fingers were being pointed at him for the problems the Conference was trying to resolve. The Conference established two tough resolutions designed to help see Kosrae through one of the worst financial crises they have ever faced.

The Conference identified nearly $2 million of cost cutting measures. All of the measures are to be implemented by the beginning of the next fiscal year. The departments responsible for implementation of the measures were identified in the supporting documents but an Adjustment Program Implementation Team is already in operation and charged with seeing that deadlines are met.

The measures were rated on a scale of the degree of difficulty for implementation from "Easy" to "Difficult". Responsibility for implementation was assigned for each measure. Governor Weilbacher has already made substantial cuts in the travel budget and has gone so far as to arrange to sell the two Jeeps that the top two leaders of the Government used to drive. He has also cut travel and representation funds for the Government. Subtract $75,000 from the Kosrae budget.

His choice for Hospital Administrator, Don Post has already said that he will give back a hefty portion of his salary for the position with the understanding that the money is to be set aside in a special fund for Hospital needs

A measure rated as "Difficult" calls for a reduction of the government by 98 employees by October of 2007. The cuts will come from each department of the Government. The Kosrae Government is currently staffed by approximately 650 employees. The cuts represent a reduction of 15% of the staff from the all levels of Government. Cost savings are estimated at over $800,000. The savings figures quoted in the supporting data for the resolutions were very specific-down to the dollar amount as if specific positions had already been identified.

The implementation team is asking for the axe to fall on an additional 32 positions that will save the state an extra $284,000 in salaries. The plan includes a 5% reduction in salaries across the board. The implementation team has recommended an additional 5% for a total of 10% reduction. They have asked for a limit of $15,000 for government employees and a reduction in work hours of 12.5%.

Kosrae has already implemented an increased sales tax and "sin" tax that combined are projected to give them an additional $209,396 in revenue. The State is also asking that the Municipal Governments in Kosrae agree to grant back to them on a temporary basis, the amount of tax that they would normally share in.

The implementation team is calling for privatization of services that have already been identified. The documentation was not clear on what types of services were projected for privatization. The team also called for improved efficiency and enforcement of tax collection.