House Passes US$526m Budget – Legislature, Executive Get Huge Salary Cut

At long last, the House of Representatives of the 54th Legislature has finally passed the Fiscal Year 2019/2020 national budget.

The budget was originally submitted at US$532.9m but was reduced to US $526 million with the salary harmonization taking effect across every sector of government.

This year’s budget will cover one thousand two hundred (1,200) health workers who were terminated from the FARA grant program and other local government staff that was not on the government’s payroll.

The over two months of the budget’s scrutiny process, a national action plan was taken that led to the proposed reduction of all employees’ salaries by six percent in the Executive Branch, excluding teachers, medical and security personnel and those earning US$500.00 and below.

The fiscal year 2019/2020 budget will also affect members of the legislature, as their salaries will be reduced by thirty-one percent which is equivalent to US$2,586 (for the House of Representatives) and thirty-six percent (for the Liberian Senate) net of monthly income tax for salaries and allowances.

According to the budget, other reduction will include fifty percent cut in gasoline distribution, so as to address compensation gap, while considering the national program, the legislature has instituted a sixteen percent reduction in the salaries and benefits of judges and six percent reduction in salaries of all employees of the judicial branch of government.

The House of Representatives during deliberation yesterday disclosed that the standardization of salaries and benefits of employees in government shall be extended to all ‘State-Owned Enterprises’ (SOE’s) and proceeds realized shall be deposited in the Consolidated Account for subsequent appropriation by the legislature.

The House’s chair on Ways, Means, Finance and Development Planning, Representative Jeremiah K. Koung, on fiscal measures said the budgetary appropriation for the Liberia Revenue Authority shall be paid immediately upon collection of revenue by the budgetary ration of five percent of revenue collection in accordance with LRA Act.

Nimba County District #1 Representative Koung further noted that all social development funds shall be transferred directly to the affected counties’ escrowed accounts and there shall be a revenue sharing between the central government and the counties for all excess budgetary revenue collected from real property taxes.

Yesterday, the budget was passed by the House of Representatives and sent to the Liberian Senate for concurrence with compensation at US$297.0 million at the exchange rate of L$210 to US$1.0.

After all of the processes leading to the passage of the budget and consultations with government ministries and agencies, the House’s committee concluded a revenue envelope of US$526 million as follows, tax revenue amounted to US377.9 m, non-tax revenue amounted to US$87.2 million and extended resources amounted US$60.8 million.

As a result of the robust decision from the House’s committee, an amount of US$10.4 million identified as additional revenue accounting for road fund arrears and contributions from SOE’s.

However, the additional revenues will be reserved as a buffer, pursuant to the standard for enrollment in the International Monetary Fund (IMF) program, but during the process, the committee considered the need to minimize budgetary risks or shortfall, they concluded to risk the US$7 million contingent revenue.

The appropriation stage of the budget debate began on Wednesday, August 21, 2019 in a 9-day public hearing, but during this rigorous budget debates, ministries and agencies were given the opportunity to defend their draft proposals and in most cases, there were doubts and insufficient information to ensure value for the money they wanted.

The draft budget when submitted, omitted a number of employees from the wage bill, health centers, hospitals and other education institutions from the drastic cut in wages.

Institutions affected were Williams V.S. Tubman University in Harper, Maryland, Ministry of Justice, Ministry of Health, Fish Town Hospital, Foya Hospital and among others. At same time it did not also consider about 1,200 health workers whose salaries were terminated from the FARA grant program are now part of the fiscal year 2019/2020 budget.

In a unanimous vote, members of the House of Representatives passed the budget for possible concurrence by the Liberian Senate

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