Branch chiefs prepare for lean years

WINDOW ROCK

It’s never too early to start discussing the fiscal 2021 Navajo Nation budget, especially with the closing of Navajo Generating Station and Kayenta Mine.

During the Budget and Finance Committee meeting Tuesday, President Jonathan Nez, his chief of staff Paulson Chaco and Office of Management and Budget Director Dominic Beyal explained the plans the executive office has in mind to offset the lost revenue from the two economic powerhouses.

“We want to get ready for the next fiscal year 2021,” said Nez. “We need to offset this budget deficit with the closure of the mine and power plant. Thirty to $50 million was the projection of money that will not come back to the Navajo Nation.”

In March 2019, tribal officials projected a $26 million reduction in fiscal 2021 because of the closures. But not considered at the time of this projection were reductions at Four Corners Generating Station and Navajo Mine.

Beyal said an expenditure plan for 2021 should be voted on hopefully by the Council’s winter session in January.

“The scope of these reductions have not been determined,” Beyal said. “Therefore it’s time to prepare the second five-year Permanent Fund plan. So the amounts can be included in the 2021 budget process.”

The 2021 budget projection starts with the controller’s office providing the regular general fund revenue projection. That along with the Permanent Fund Income revenue projection begins the budgeting process.

The Permanent Fund was established in 1985 under then-Chairman Peterson Zah to replace revenue should the tribe no longer be able to depend on its natural resources for income, as is happening now.

“The Permanent Trust Fund plan will set the tone for the 2021 budget,” said Nez. “Also for the budgets for the next five years. We like to entertain the proposal before the winter session Council … We need to reevaluate those dollars.”

The Diné Bi Beeso work group is comprised of the Department of Justice, controller’s office, Office of Management and Budget, president’s office, tax commission and the divisions of economic development and community development.

The group has come up with three options to provide most of the income for the general fund budget, said Beyal.

• Option A: Income funds go to the budget and the excess goes to other designated needs and purposes. Branch chiefs and Budget and Finance Committee could make the designations in the annual budget process.

• Option B: Income funds go to the budget and the excess to the Undesignated, Unreserved Fund for general purposes.

• Option C: Income funds go to budget and the excess to the Sihahsin Fund for infrastructure and education.

At the beginning of his presentation, Nez said that the Nation has at least $300 million worth of capital projects yet to be started and agreed with Delegate Amber Crotty that a moratorium should be considered on these projects until they can catch up.

There are also simply not enough Navajo-owned businesses that can handle this amount of projects, he said.

“It’s time for a moratorium until we catch up with some of these projects,” said Nez. “Not only with the UUFB, but with the Sihasin dollars, because New Mexico capital projects time is ticking.”

Chaco said that $300 million in projects is unheard of to have that many.

There are currently New Mexico, Sihasin, PTF, Indian Health Service and other projects that make up this amount and more projects were added on.

“Adding onto that, I guarantee you that you wont see any of those projects in four or five years,” said Chaco. “We want to give the opportunity for us to catch up on some of these projects.”

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