Nez espouses frugality for coming fiscal year
Navajo Nation President Jonathan Nez and Vice President Myron Lizer have sent a message for the Navajo Nation budget season and it’s a message of practicing frugality and conscientiousness spending.
During a Tuesday Budget and Finance meeting Nez presented his message and discussed what his staff, along with the Office of Management and Budget, and Office of the Controller have been mapping out when it comes to the upcoming 2020 budget season.
“As leaders we cannot and should not continue the spending practices of the past with no regard for what lies ahead for our future generations,” said Nez in his statement. “We must manage our finances wisely.”
Nez and Lizer are proposing a budget of $167 million for the upcoming 2020 fiscal year, using the $143 million in projected revenue combined with $19 million from the interest income earned from the Permanent Trust Fund principal, $525,000 from the Permanent Fund Five-Year Contingency Fund, and nearly $4 million from non-recurring funds from the Navajo Generating Station retirement savings.
For the upcoming fiscal year that begins on Oct. 1, the current revenue projection is approximately $158 million, which is a $14 million decrease from the current fiscal year budget of $172 million. For fiscal year 2021, the Nation’s revenue projection is expected to drop significantly to $132 million due to the closure of the Navajo Generating Station and Kayenta Mine.
Currently there is an estimated $42 million in the Unreserved, Undesignated Fund Balance. The Nez-Lizer Administration is proposing to set-aside $21 million from the UUFB to use in fiscal year 2021 to offset the decreased revenue.
“The Fiscal Year 2020 revenue projections are steady, but we will need to plan for the years beyond 2020,” said Nez. “This is not a time for spending today what we will not have tomorrow. This fund, for many years, had been the go-to fund for all constituent-pleasing projections, often disregarding the true needs of the community.”
Before Nez gave his presentation the committee decided when they would begin the initial process of the budget season, which kicks off on May 22. This will be the first budget season for both the 24th Navajo Nation and Nez-Lizer administration.
During the past Russell Begaye-Jonathan Nez Administration, each year there seemed to be a fiasco when it came to the signing of the budget, causing chaos. Last year, Begaye had waited an extra day after the allocated 10 days given to the president to sign the 2019 budget. For the 2017 budget, Begaye was accused of signing the budget illegally with a stamp of his signature. Both incidents were questioned by former Speaker LoRenzo Bates and the 23rd Navajo Nation Council.
“The way its been going for the past four years, that budget amendment resolution doesn’t get enacted until typically in November,” said Dominic Beyal, executive director for OMB. “By then we were talking about a 10-month budget.”
But should Nez hold true to his “Work together” message, these scenarios should be a thing of the past. Nez has a couple of other possible suggestions for future budget practices, including developing a two-year budget plan, and possibly using the $311 million Sihasin Fund to go toward government services.
“Using the Sihansin Fund this year to fund our government services is a creative plan for the future,” said Nez.
Budget and Finance Committee member Amber Kanazbah Crotty said the two-year budget was an idea that has been mentioned before and should be considered. She also asked what the impact would be of using the Sihasin Fund because interest is earned from these dollars.
“With any plan we should look at the benefits and also look at the challenges,” said Crotty. “We need to engage our people in this discussion and maybe they should set the tone for the resolution on what their budget priorities are for the nation.”