JEMCO resolved at its September meeting to reduce compact grant funding by $2.8 million over four years. The college currently receives $3.8 m from the compact grant annually. This resolution was passed with three votes in favor from the U.S. representatives and two votes against it from the FSM members of the JEMCO.
The Joint Economic Management Committee resolved that effective FY 2013, Compact Sector funds provided to the college will be reduced at a minimum annual rate of $700,000. The reduction will be implemented over a four-year period or until the annual Compact funding for the college is reduced to $1m per year. This change constitutes a 74 percent reduction in the area of education sector funding to the college. The JEMCO recommended the college to increase its "capture rate" for Pell Grant or to find ways to depend more on Pell Grant funding to make up for the decrease in Compact support.
During the same meeting, JEMCO resolved that project proposals for the college infrastructure projects will not be considered for approval during the fiscal years period 2012-2016.
JEMCO also resolved that a comprehensive review of the educational priorities and resources of the FSM should be undertaken involving all appropriate leaders, officials and community leaders. The review should determine the most appropriate funding resources, in light of decreases in compact funding over the remaining years of the Compact, and should take into account additional funding resources such as local revenues, increased fees and PELL grant revenues. National recommendations shall be made and presented to the FSM President and Congress and to the JEMCO prior to June 1, 2012.
In his letter to Chairman Pula of JEMCO, FSM President Mori asked whether the FSM and the U.S. have moved to a point in their bilateral relationship where major policy and budgetary decisions can be presented without any significant prior discussion with FSM leaders and voted on in a forum where the U.S. always carries the majority.