Senators decided Tuesday against introducing an amendment to authorize the use of up to $50 million from the government’s line of credit to cover revenue shortfalls and instead approved a budget bill that allocates $2.9 million from the Indirect Cost Fund to give departments and agencies handling federal grants access to a portion of that funding.
Recent concerns about the government’s financial stability have escalated due to outstanding payments to various vendors, notably contractors owed by departments such as Health, Human Services, and Tourism. Gov. Albert Bryan Jr. addressed these financial challenges during a Monday press conference, citing the impact of a slower off-season post-pandemic and substantial payments, including tax refunds and retroactive wages, which have strained government finances, further exacerbated by a commitment to pay $25 million in retroactive wages this year.
Government House stated an expectation of improved revenue post-peak season, foreseeing increased consumer spending, visitor influx, and higher gross receipts tax payments. However, to address the immediate strain on cash flow, Bryan said Monday that recent discussions with the Legislature included tapping into the government’s existing $100 million line of credit for operations, pending Senate approval since these funds were initially designated for other purposes.
However, during Tuesday’s legislative session, the anticipated amendment was not introduced as senators expressed concerns about fiscal responsibility and a lack of adequate financial documentation. Instead, a budget bill, previously held back from the fall submission to the governor, passed on an 11-3 vote. This bill enables agencies administering the government’s federal grants, including support entities like the Office of Management and Budget, Finance, Property and Procurement and Personnel, to access the portion of funding typically allocated for their operational expenses.
According to Sen. Donna Frett-Gregory, chair of the Finance Committee, the budget bill was held back after summer budget hearings while the government updated its general ledger. Frett-Gregory noted that the fund typically generates approximately $8 million throughout the fiscal year and accrues over time.
