Budget proposal pares $8.8 million from general fund
Let the belt-tightening begin.
The Navajo Nation Council voted to approve a $1.3 billion operating budget for FY 2020 during a special session last Tuesday, of which $163.2 million are general funds.
The entire operating budget represents a significant increase over the current year’s $767 million and the first time the tribal budget has been over $1 billion. However, the increase is an illusion. “This is the first year they decided to include carryover funds from this year in the operating budget,” explained budget officer Emmett Francis. “These are the funds that are just sitting there in the different accounts.”
The budget got exactly the 16 votes needed to approve it, leaving four voting against it. These calculations are subject to change by Office of Management and Budget.
“This is a reduction from the FY 2019 (general fund) budget of $172 million,” said Budget and Finance Committee Vice Chair Ray Smith, the bill’s sponsor. “This starts the belt-tightening process because the general funds revenue will decline in late 2020.”
The tribe stands to lose about 20 percent of its annual revenue when the Navajo Generating Station closes its doors at the end of this year. The Kayenta Coal Mine, which supplied the power plant, stopped operations at the end of August.
The new general fund budget, however, represents only a 5 percent decrease over this year’s. The majority of the impact will be felt in 2021, so the 2020 budget includes allocating some reserves for that year, Francis explained. Navajo Nation employees’ salaries won’t take a hit and the budget allows a 2 percent pay raise.
Rather than the take the 5 percent out of any one area, the general fund decrease was spread over all the departments and programs, Francis explained.
The approved budget includes an operating budget of $16.5 million for the legislative branch, $19.8 million for the judicial branch and $1.1 billion for executive. Navajo Nation chapter non-administrative costs were also included in the approved budget at an amount of $11.9 million.
The final amounts are pending required adjustment by OMB. The Council also approved a $5 million carryover for the three branches. The carryover allocates $3 million to the executive branch with priority allocation of $1 million to cover chapter-meeting stipends. The legislative branch and judicial are allocated $1.5 million and $500,000, respectively.
The final carryover amounts are subject to balances at the end of the current fiscal year. Under the approved budget, a total of $2 million is allocated to chapter official stipends. “The branch divisions, oversight committee are to be congratulated for keeping within the budget allowed allocations,” said Smith.
The legislation also sets aside $21 million from the Undesignated, Unreserved Fund Balance and $10.9 million from the Permanent Fund income to reserve for the 2021 general fund budget. “This is $31 million ready to be put into the pot for the 2021 budget cycle,” said Smith. “It should cover the budget needs as the general fund decreases.”
The budget process begins when the controller of the Navajo Nation issues the general fund revenue projection at the end of March, said Dominic Beyal, director of OMB. “We have a balanced budget,” said Beyal. “All of it fits within the parameters as set when we started down this process.”
Unlike at Naabikiyati, when the committee members swiftly and unanimously voted to approve the budget, once it hit the Council floor the delegates started asking questions, making comments and proposing amendments.
Law and Order Chair Eugenia Charles-Newton made a point to ask if the budget was put together properly so that they wouldn’t have to come back and figure out reallocations for the Division of Aging, or the program’s unpaid bills, or ensure the elders of this program are getting enough food. “This seems to be a constant issue, “said Charles-Newton. “I need reassurance that the budget is put together properly.” Charles-Newton said that working with certain division directors, including her own, has been a struggle and she wondered if Council was the place to air that since this working relationship seems to be seeping into the budget.
“If I was mean I would call them out right now,” said Charles-Newton. “At least 10 of us were informed that one of the presidents of the past had directed their directors not to work with Council. I hope that’s not happening today.” She then tried to pass an amendment, which failed, that would have required that oversight committees receive monthly reports from division directors regarding expenditures of appropriations to ensure that “people are receiving the service they need.”
The Law and Order Committee’s Edmund Yazzie said this is an excuse to micromanage and should not be considered. “If this amendment passes the division director and program managers still have the option of not going before appropriate committees,” said Yazzie. “Let’s not start this practice of micromanaging. As Council we need to know our boundaries.”
B&F Committee member Amber Crotty said this information for expenditures is out there already and this amendment may open up conversations, but what is needed is to identify the top four programs that need constant oversight on how they spend their money such as Division of Aging and Long Term Care Support, Navajo Head Start and Navajo Department Of Transportation.
B&F Committee member Nathaniel Brown said the amount of time it would take for directors to do these reports would better be spent working with the programs and people. “I used to be a director,” Brown said. “I was required to do monthly reports. It takes a couple of hours. I think there was boasting about these individuals that they are educated … they would be able to handle this situation and do it in a timely matter.”
President Jonathan Nez will have 10 calendar days to consider the budget resolution once it is delivered to the president’s office from the legislative branch. He requested the Council hold a special session to discuss and consider unmet needs, including funding to complete a women’s and children’s shelter in Shiprock, funding for the Department of Aging and Long Term Care Services, and more.