Budget and Finance introduces emergency legislation to avoid government shutdown

WINDOW ROCK

Instead of approving the agreed fiscal 2025 budget of $222,775,780, the Budget and Finance Committee introduced an emergency bill, Legislation No. 0206-24, to keep the tribal government operational for six months.

If approved, which needs only a majority vote, the emergency legislation would go into effect Oct. 1, and end on March 31, 2025.

The emergency legislation, sponsored by B&F Chair Shaandiin Parrish, would cut the $222,775,780 budget in half.

Parrish’s emergency legislation would be for $111,387,890, split amongst the three branches, and other tribal programs like scholarships and veterans-related services.

“The lack of an approved FY2025 comprehensive budget would ‘directly threaten the sovereignty of the Navajo Nation’ and could cause negative impacts throughout the Navajo Nation,” the emergency legislation reads. “Because of the fast-approaching end of Fiscal Year 2024 on September 30, 2024, there is a ‘pressing public need’ for immediate Council action to approve a continuing resolution as a temporary stop-gap measure for FY2025.”

While Navajo Nation police are mostly funded with P.L.-638 money, potential interruptions to services that are funded by tribal general funds, like maintenance of emergency vehicles, could impact and interfere with police providing adequate police services.

To avoid that, a continuing resolution has been proposed to cover central government operating costs for the next six months. This measure also includes provisions for 100% of trust fund revenues designated to support essential programs like veterans-related services and scholarships for college students.

“When we use the term continuing resolution, it’s primarily focused on the central government operating costs. Yes, this continuing resolution is six months for the central government to continue so that further negotiation can be had on those operating costs,” Parrish said on Saturday in Kayenta.

Parrish was in Kayenta to provide an update to the Western Agency’s 18 chapters on what the Council, the B&F, and she – as a delegate – have been doing.

Certain programs listed in the emergency legislation will receive full funding, amounting to 100% of their requested budget for fiscal 2025.

The Navajo Nation Veterans Administration, funded by the Navajo Nation Veterans Trust Fund, will receive $5,793,794 to support the five Navajo Nation Veterans Administration, or NNVA, agencies. An additional $4,849,100 is allocated for the NNVA Housing Program, with all funds to be used according to established budgetary guidelines.

A total of $12.4 million will be appropriated from the Diné Higher Education Grant Fund. Specific allocations from this fund include $3.5 million for the Office of Navajo Nation Scholarship and Financial Assistance, $4.7 million for Diné College, and $4.2 million for Navajo Technical University. Other funding includes $338,613 for Navajo Teacher Education, $910,264 for the Graduate Scholarship Trust Fund, $65,418 for the Tucson Gas & Electric Scholarship Fund, and $42,258 for the Navajo Engineering Construction Authority Trust Fund. Additionally, the Sales Tax Scholarship Fund, which supports various scholarship awards, will receive $8,035,968, while the Vocational Trust Fund will get $180,856 and the Risk Management Program will be allocated $21,204,172.

The Budget and Finance Committee has opted not to allocate the entire projected revenues for fiscal 2025, citing several critical factors that influenced their decision. One major concern, Parrish said, is the anticipated decline in revenues for the Navajo Nation in fiscal 2026 and fiscal 2027, which necessitated a more cautious approach to budgeting. Parrish added that their decision reflects a broader strategy of financial prudence when managing public funds, particularly those based solely on expected revenues rather than actual collections.

“We asked the Office of Management Budget, the Office of the Controller, and the Department of Personnel Management, to present all the items that they presented to the three branch chiefs, and to give us the same items. The committee took a look at that and said, ‘OK, we also know how much they spent in FY 2024 they spent only 50 percent of their budget. We also see that there’s a $20 million decline for FY26 and there’s a decline in FY27,’” explained Parrish.

She added that having $20 million this fiscal year was good but seeing a decline in coal revenues the tribe receives, the tribe needs to become more fiscally responsible.

“It’s great that we have twenty million this year, but to maintain the operations for the Navajo Nation, we need to be fiscally responsible and say, ‘OK, central government, you can maintain your budget at this amount because you’ve only spent 50 percent of your budget anyway,’” she said.

Parrish emphasized the importance of fiscal responsibility, especially given that much of the funding under consideration consists of revenues that have yet to be realized. The committee’s conservative stance is to mitigate potential shortfalls that could arise from overestimating future income.

Parrish said that in discussions held on May 16 and May 21, representatives from the controller’s office reported that most programs had used only 53% or less of their allocated fiscal 2024 budgets by the end of the third quarter. This statistic raised concerns about budgetary efficiency and the timely execution of financial plans within the various programs. Ideally, spending patterns should align with fiscal expectations—programs should use half of their budgets by the end of the second quarter and three-quarters by the close of the third quarter.

How much each branch – Executive, Legislative, and Judicial – will be appropriated was not written into the emergency legislation.

Kris Beecher, the president’s deputy chief of staff, said they would provide comment until the Council convenes and begins discussing the specifics of the funding allocations.

“We are preparing remarks, but we may wait until the Council marks it up,” Beecher wrote in a text on Saturday.

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