Liberia: House Passes US$526M Draft Budget with Drastic Cuts in Legislature, Judiciary Salaries
Capitol Hill, Monrovia – The House of Representatives has finally voted in favor of a motion to pass into law the draft national budget for fiscal year 2019/2020 with massive cuts in lawmakers’ salaries and benefits.
The decision was taken by a unanimous vote on Tuesday, October 1, during the 24th day sitting of the House of Representatives’ extraordinary session following a report by the Joint Committee on Ways, Means, Finance, and Public Accounts and Expenditure.
The budget is in the tune of US$526 million, which is almost US$7 million short of the US$532.9 million submitted by the Executive for scrutiny.
Of the total US$526 million, tax revenue accounts for US$377.9, non-tax revenue, US$87.2 million and external resources accounts for US$60.8 million.
Unprecedented Changes, Drastic Cuts
In order to craft a realistic budget and to avoid the recurrence of budget shortfall and to meet the International Monetary Fund (IMF) Standard, the House Joint Committee on Budget said it instituted several measures including salary reduction and omission of the contingency revenue portion.
According to the committee, US$10.4 million was identified as additional revenue accounting for road fund arrears and contributions for State Owned Enterprise (SOEs).
However, the revenue will be reserved in line with the Government’s standard for enrollment in the IMF program.
To minimize budgetary shortfall, the Committee said it opted to omit US$7 million contingent revenue – this represents five percent of the entire budget, which was submitted by the President.
The Public Financial Management Law (PFML) called for the appropriation of five percent of the national budget as contingent revenue.
In addition, the committee noted that the draft budget as submitted did not cover the salaries and incentives 1,200 health workers. These health workers were being compensated by a USAID project – FARA grant program. But the program has ended its compensation component.
The House budget committee also discovered during the hearing that Nurses and Doctors at the Fish Town Hospital in River Gee and Foya Hospital in Lofa, among others were left out of the payroll.
To accommodate all these civil servants, the Joint Committee in its report noted that it instituted a national action that led to the proposed reduction of all employees’ salaries.
Reported joint Committee: “By this, the Committees with the mandate of Plenary instituted a national action that led to the proposed reduction of all employees’ salaries by six percent in the Executive excluding teachers, medical and security personnel, and those earning US$500 and below, while members of the National Legislature will have a reduction of 31 percent or US$2,586 (for House of Reps.) and 36 percent or US3,600 (for the Senate) net of monthly income tax for salaries and allowances, and other reductions to include 50 percent cut in gasoline distribution, so as to address compensation gap.”
In the report submitted to plenary, the joint committee outlined that public administration accounts for US$183,855,474, Municipal Government: US$21, 031867, Transparency and Accountability: US19, 804,530; Security and Rule of Law: US$76,518,828; while Health accounts for US81, 557,132.
Also, Social Development Services carries US$10,048,992, Education: US$81,557,132; Energy & Environment: US$12,079,146, Agriculture: US$6,208,754, Infrastructure and Basic Services: US$33,350,005 and Industry and Commerce account for US$6, 066362.
Prior to the passage of the draft national budget, the Acting Chairman of the joint budget Committee, Rep. Jeremiah Koung (Nimba District #1), along with several lawmakers including Francis S. Dopoh, Clarence Massaquoi, George Bolley and Edward Karfia pleaded for cut in lawmakers’ salaries and benefits.
With that, the House voted unanimously in favor of a motion filed by Rep. Crayton Duncan of Sinoe County.
Grounds for Slashing Salary
Meanwhile, the House of Representatives also voted to pass into law the National Remuneration Standardization Act of 2019, which now allows cut in the salary of members of the judiciary – judges and justices of the Supreme Court.
The Act was passed before the budget was cleared and ready to be sent to the Senate for concurrence.
The objective of the Act is to ensure that salaries, allowances and benefits across Government entities are uniformed and equitable for work done.
It also seeks to narrow salary disparity and ensure public resources are managed properly and efficiently.
Section one of the Act: “Upon passage into law, the Legislature shall harmonized the salaries, allowances and benefits of all public officials and employees including civil servants and reduce or increase such remuneration to the extent possible.”
Section 4 of the Act states that it shall take effect upon the passage into law within the same fiscal budget year in which it is published.
Rep. Younquoi cautioned his colleagues to review the law and pass it in a way that it will not be termed as retroactive.
But Rep. Koung noted that the Joint Committee consulted heads of the three branches of Government and they all consented to the salary cut and passage of the law.
The bills will now be sent to the Liberian Senate for concurrence. If passed by the Senate, they will have to be signed by the President and printed into hand bills.
Due to delay in its submission by the President, the Legislature was compelled to call for an extraordinary session which is expected to be concluding on Friday, October 4.