The CNMI Public School System has returned to court in a renewed fight over constitutionally mandated education funding, suing Gov. David M. Apatang and acting Finance Secretary Natalia M. Sablan over what it alleges is an unlawful budget formula that deprives public schools of nearly $12 million in fiscal year 2027 funding.
The complaint, filed Oct. 30 in Superior Court by PSS through Interim Commissioner of Education Jacqueline P. Che, seeks declaratory and injunctive relief and asks the court to order a recalculation of the Commonwealth's constitutional funding obligation to public education.
Summonses have been issued to Apatang and Sablan in their official capacities, requiring them to respond to the lawsuit through the Office of the Attorney General.
At the center of the dispute is an article of the CNMI Constitution that guarantees public elementary and secondary education an annual appropriation of no less than 25% of the Commonwealth's general revenues.
PSS argues that the Fiscal Year 2027 Budget Plan Act improperly reduces the revenue base used to calculate that constitutional funding requirement by deducting debt-service payments and other obligations before determining the amount owed to public schools.
The lawsuit revives a legal battle that previously reached the CNMI Supreme Court during litigation between PSS and the administration of former Gov. Ralph DLG Torres. In a landmark 2020 decision, the high court ruled that revenues may be excluded from the constitutional funding calculation only when they qualify as special revenues and have a sufficient connection between the source of the funds and the purpose for which they are restricted.
PSS contends the current budget methodology conflicts with that ruling by treating debt-service obligations as deductions from general revenues before calculating the school system's constitutional share.
According to court filings, the FY 2027 budget identifies about $152.8 million in budgetary resources. After deducting special-revenue earmarks and approximately $47.7 million in debt-service obligations, lawmakers calculated roughly $100.7 million as available for appropriation, resulting in an allocation of about $25 million to PSS.
The school system argues debt-service payments are expenditures rather than revenue classifications and therefore should not reduce the constitutional funding base. Under PSS's calculations, the base should total roughly $148.4 million, entitling the school system to approximately $37.1 million. The lawsuit alleges the current budget leaves a shortfall of at least $11.9 million.
Court documents note that Apatang's original budget proposal included approximately $37.1 million for PSS. However, lawmakers ultimately appropriated about $25 million.
PSS said it is not seeking to interfere with debt-service payments, pension obligations or other legally required expenditures. Instead, it is asking the court to determine the proper constitutional funding level and ensure sufficient revenues are available to satisfy the mandate.
The complaint warns the alleged shortfall could force reductions in instructional time, employee work hours, staffing and student services during the current fiscal year.
PSS is seeking declarations that portions of the FY 2027 budget law are unconstitutional, an expedited hearing and an injunction preventing the expenditure of certain general revenues until the dispute is resolved.
As of Thursday, no responses had been filed by the governor or the Department of Finance.
