2013 Budget is turned over to President Shelly
By Marley Shebala
WINDOW ROCK, September 27, 2012
N avajo Nation President Ben Shelly must decide whether to use his line-item budget veto on a 10 percent cut to the Permanent Trust Fund, which has always been 12 percent and set aside of tribal general funds.
During the Council's debate over the 2013 budget of $543.6 million on Sept. 21, Delegate Leonard Tsosie (Baca-Prewitt/Casamero Lake/Counselor/Littlewater/Ojo Encino/Pueblo Pintado/Torreon/Whitehorse Lake) successfully lead a motion to decrease the 12 percent set aside of the 2013 projected tribal general funds for the Permanent Trust Fund to two percent.
The 2013 projected revenues are about $228.7 million and according to the 2013 comprehensive budget legislation, the 12 percent set aside of $228.7 million was calculated at $28.5 million.
But with the Council's vote of 12 to 7 in favor, 10 percent of the $228.7 million became available for deposit into a "nation building" account instead of the Permanent Trust Fund.
Budget and Finance Committee Chair LoRenzo Bates (Nenahnezad/Newcomb/San Juan/T'iistoh Sikaaad/Tsé Daa K'aan/Upper Fruitland), who sponsored the proposed 2013 budget to the Council, immediately advised the Council to oppose Tsosie's amendment to the budget for several reasons.
Bates said the main reason for opposing Tsosie's amendment was that the reduction of the Permanent Trust Fund set aside, which is part of Navajo law, could not be done through the budget process.
"I don't think the Council can do that," he said.
According to the PTF law, the people, not the Council, are the only ones who can change the 12 percent set aside through "a referendum adopted by a two-thirds majority of those voting in an election open to all registered Navajo voters."
Bates also said that Tsosie's amendment basically takes the money earmarked for the Permanent Trust Fund, instead of allowing it to earn interest.
And he said the Council could access the available PTF income or earned interest as soon as they develop and approve a five-year plan. The interest earned from the investment of the fund principal was available for appropriation by the Council in 2007 through a five-year plan approved by the Council.
But the Council has not approved a five-year plan and so since 2007, the Council has been waiving that portion of the law. The PTF law does not say how the five-year plan would be developed.
The Permanent Trust Fund income is estimated to be about $25 million, while its principal is estimated to be at $1.2 billion.
Budget and Finance Committee Vice Chair Jonathan Nez (Navajo Mountain/Oljato/Shonto/Ts'ah bii Kin) supported Bates' call to the Council to oppose Tsosie's amendment because it did not follow law.
Nez noted that if Tsosie's amendment had involved one of the tribe's other trust funds that it "might have been doable."
He called on Tsosie to change his amendment or for Speaker Johnny Naize (Blue Gap-Tachee/Cottonwood-Tselani/Low Mountain/Many Farms/Nazlini) to rule Tsosie's amendment out of order.
"We need to be careful on our actions today regarding the Permanent Trust Fund," said to the Council.
As he began reminding the Council about the opposition from the people, Delegate Katherine Benally (Chilchinbeto/Dennehotso/Kayenta) called to Naize for a "point of order."
Benally said the fund belongs to the people and the people are saying, "It's my money and I want it now." She added that the people never approved the use of $2 million from the PTF for a gaming loan.
Tsosie agreed with Benally and accused the Council's Investment Committee and tribal Department of Justice of twisting the law.
He urged the Council to support his amendment instead of waiting ten years for the casinos "to give us something."
Bates, in an interview with the Navajo Times on Tuesday, said, "They can argue all they want but it's legal."
He pointed to section 2 of the PTF law, which states, "All amounts deposited in the fund shall be invested as soon as is reasonably practical … by the Navajo Bond Financing and Investment Committee and approved by the Budget and Finance Committee."
When the Council cast its final vote on the 2013 budget on Sept. 21 at 6:16 p.m., there were 17 "yes" votes and 2 "no" votes.
Shelly received the budget on Sept. 25 and now has 10 days to take action on it.
But with the 2012 budget ending on Sept. 30, the 2013 budget needs to be in place on Oct. 1, otherwise the tribal government comes to a grinding halt without a budget on that day.