Monday, September 08, 2008


Labor: $4.4M yearly in lost income under federalization


By Agnes E. Donato
Reporter
The Department of Labor says the Commonwealth will lose about $4.4 million a year once the federal government takes over the local labor system.

Cinta M. Kaipat, deputy secretary of labor, said the department projects that it can generate about $6.1 million in revenues in the 2009 fiscal year and in each subsequent year. Factoring in its annual budget of $1.7 million, the Labor Department would bring in a net $4.4 million, or an average of $350,000 to $400,000 every month to government coffers.

“If federal officials are allowed to take over our labor functions, PL 110-229 is very specific; we will lose all labor revenues,” Kaipat said in a letter to the Legislature. “So come June 1, 2009, the Commonwealth will be short some $400,000 every month in its budget.”

But some lawmakers are not convinced by the department's claim.

Rep. Diego T. Benavente, chairman of the House Committee on Federal and Foreign Relations, said the “federalization” of labor and immigration will save the government some money as well.

“There will be some offsetting of what money we'll lose with what we will save from not having to deal with the foreign workers,” said Benavente, whose committee is drafting a legislative report on the administration's plan to sue the U.S. government over the new immigration law.

Rep. Tina Sablan, a supporter of federalization, echoed Benavente's statement and urged the Labor Department to provide lawmakers with a detailed computation of potential savings from federalization.

“Until we get a more balanced picture of what the impact will, I will consider this claim as nothing more than propaganda designed to get us to support the lawsuit,” she said.

In her letter, Kaipat said the Labor Department is able to generate money faster now more than ever. The new automated processing system allows the department to collect fees faster. Fines are being collected from the old labor cases that have been resolved recently. And a more efficient “barred list” process ensures that employers who owe fines do not get services from the Labor Department until those fines are paid.

At the same time, Kaipat said, Labor has taken steps to streamline its operations. A new website has been installed to cut costs. Personnel are being cross-trained so that every staff member can do at least two jobs.

Kaipat said all the revenue generated by the Labor Department will be lost once federalization goes into effect. “There will be no negotiating about this loss of revenue. It has been commanded by Congress,” she said.

Unlike in Guam or the U.S. Virgin Islands, federally collected fees will not be turned over the Commonwealth government, she added.