Navajo Nation Council approves budget for fiscal year 2020, anticipates loss of revenue
WINDOW ROCK, Ariz. — The Navajo Nation Council approved a comprehensive budget of about $1.25 billion for fiscal year 2020 that reflects an expected loss of revenue in the near future due to the pending closure of the Navajo Generating Station and the Kayenta Mine.
The amount consists of approximately $163.2 million in general funds and about $1.1 billion in federal, state and private funding.
Delegate Raymond Smith Jr., who serves as vice chairman for the Budget and Finance Committee, sponsored the legislation containing the budget.
In remarks at the budget session on Sept. 3, Smith explained the $1.1 billion in external funding was due to the reporting of unspent balances from prior fiscal years and action by the Budget and Finance Committee to have these amounts reported and transferred to the fiscal year 2020 budget.
He also explained that the three branch leaders reported to the committee in June that the base amount for the general fund was $167 million for fiscal year 2020.
Belt tightening begins
The amount is lower than the general fund revenue of $172 million for fiscal year 2019, he said.
"This marks the belt-tightening process because general fund revenue is declining in late FY 2020 and into FY 2021," Smith said.
The decline will be due to the loss revenue, taxes and royalties from the Navajo Generating Station and the Kayenta Mine. Both operations are scheduled to close this year.
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To prepare for the reduction in fiscal year 2021, the budget calls for saving $21 million from the Unreserved Undesignated Fund Balance and $10.9 million from the Permanent Fund Income.
When the budget process started in the spring, the executive, judicial and legislative branches received projected allocations and formed their budgets based on those amounts, Smith explained.
He commended the entities and the oversight committees for recommending operating budgets that stayed within the allocations.
"They did a good job when they came forward," Smith said.
The fiscal year 2020 budget includes using approximately $2.2 million from the personnel savings fund for a 2% general wage adjustment for tribal government workers.
Smith said the wage adjustment was recommended because employees need to be "fairly compensated for the daily jobs and to continue their productivity and morale."
The personnel savings fund will also be used to cover expenses such as stipends for chapter officials, salaries for legislative district assistants, consultants for the speaker's office, and to help the Navajo Nation Department of Aging and Long-Term Care Services.
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Navajo Nation President Jonathan Nez and Vice President Myron Lizer issued a message on Sept. 3 to the council regarding the budget.
The leaders mentioned programs under the executive branch had prioritized expenditures to deliver services to the Navajo people, but they are concerned about adjustments made by the Budget and Finance Committee on Aug. 29.
Among those changes were reducing stipends for chapter officials from $2 million to $1 million and using $250,000 from the personnel savings fund to hire a lobbyist to address a federal proposal to amend the Radiation Exposure Compensation Act.
Nez commended the council, division directors and employees for developing the comprehensive budget in a Sept. 3 press release from his office.
"We will take a very close look at the budget and determine if it meets the priorities of the Navajo people and also to determine areas where we need to continue working with the council to address," the president said.
Nez has 10 calendar days after the bill is submitted to his office to sign, veto or use his line-item authority on the measure.
Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 or by email at nsmith@daily-times.com.
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