SUPPLEMENTAL APPROPRIATION REQUIREMENT, FISCAL YEAR 1961 The Canal Zone Government requires a supplemental appropriation of $464,500 for fiscal year 1961 operating expenses to permit payment of additional costs. The costs which result from legislation enacted subsequent to submission of 1961 budget estimates and which are beyond the agency's ability to absorb, are as follows: Costs resulting from enactment of "The Federal Employees' Salary Total... $430, 700 33, 800 464, 500 The Canal Zone Government 1961 operating expense appropriation, which is $50,000 less than was appropriated in 1960, is already absorbing substantial costs beyond those which could be foreseen when 1961 estimates were originally developed in 1959. These costs. which amount to some $200,000, include: the agency's contribution under the "Federal Employees Health Benefits Act" (Public Law 86-382); strengthening of police protection; and the cost of meeting increased demands on hospital and school facilities. The latter is being caused by a higher than anticipated population level, resulting in part from the addition in the Canal Zone of a second U.S. Army battle group. Also contributing is the June 1960 parochial kindergarten closing which places an additional pupil load on the kindergartens operated by the Canal Zone Government school system. Further absorption of costs would jeopardize community health and safety and would result in a lowering of educational standards. The effect that lack of funds may have on Canal Zone hospitals and public health activities is particularly alarming. Such essentials as quarantine and immigration controls, school health programs, annual chest X-rays, antimalarial measures, sanitation and foodstuff inspections, and garbage collection must be continued at adequate levels if there is to be an effective working force. Some years ago, a Canal Zone Government financial problem was "solved" by reducing, among other things, the scope of mosquito control activities. The predictable repercussion was a surge in reported cases of malaria from a low of zero in March 1956, to an average of 52 per month during the latter half of 1957, at which time supplemental funds were needed to bring the condition under control. Unavoidable Canal Zone Government cost increases cannot be met by jeopardizing community health. Since Canal Zone Government operations are primarily directed toward finishing essential state and municipal services to all Canal Zone residents and, to some extent, transients, the problem extends beyond the immediate confines of the Panama Canal Company and the Canal Zone Government and impairs the ability to properly serve the Canal Zone population. The $430,700 cost estimate for the pay acts is based upon actual payroll and the related retirement fund contribution for a representative actual payroll period, thus giving effect to normal position vacancies, and, on an annual basis, applying the 71⁄2 percent increase factor thereto. The agency will endeavor to absorb related costs such as: increased Federal Insurance Contributions Act and Federal employees' group life insurance payments; and the increased cost of work performed by the Panama Canal Company for the Canal Zone Government. The $33,800 cost estimate for increased alien cash relief payments is based on the assumption that the actual number of eligible annuitants at June 30, 1960 (287) will be reduced by one each month, based on most recent attrition experience, and applying the $10 per month across-the-board increase, granted by the law, to the remaining number of eligibles. The requested supplemental funds, as well as the regular annual appropriation for Canal Zone Government operations, will be repaid to the U.S. Treasury in fiscal year 1961 both through receipts from services and by the Panama Canal Company from its own resources. LIMITATION ON GENERAL AND ADMINISTRATIVE EXPENSES, PANAMA CANAL COMPANY SUPPLEMENTAL AUTHORIZATION, FISCAL YEAR 1961 The Panama Canal Company requires a $732,200 increase in the limitation on general and administrative expenses to enable it to absorb, within its own resources, additional costs resulting from legislation enacted subsequent to the submission of its 1961 budget programs, as follows: Costs resulting from enactment of "The Federal Employees' Salary $317, 200 Increased payments resulting from enactment of an amendment (Public 433, 500 18, 500 415, 000 Remaining requirement Total... 732, 200 In Within the existing 1961 general and administrative expense limitation, the Company is already financing substantial costs beyond those foreseeable when the limitation request was originally developed nearly a year ago. Some of these derive from the President's nine-point program for bettering relations with Panama, including a wage increase granted May 1, 1960, to locality rate employees, and the expansion of the apprentice training program to admit 25 Panamanians annually. Other unanticipated increases include those resulting from: the cost of administering the Federal Employees' Health Benefits Act (Public Law 86382); expenses incident to heavier than anticipated recruitment and repatriation requirements; payments resulting from additions to death and disability rolls beyond the level provided for; and increased building maintenance costs. fiscal year 1960 all previous Panama Canal records for maritime traffic and tolls income were surpassed. That this trend is continuing into fiscal year 1961 is indicated by the fact that tolls income in July exceeded that of any month in the history of the enterprise. The record high level of maritime traffic through the canal involves a corresponding high level of administrative effort which makes unworkable the financing of further additional costs within the existing limitation. The $317,200 cost estimate for the "Federal Employees' Salary Increase Act of 1960" is based on the actual payroll and the corresponding retirement fund contribution for a representative actual payroll period, thus giving effect to normal position vacancies, and, on an annual basis, applying the 72-percent increase thereto. The estimated net cost of increased cash relief payments is based on the assumtion that the actual number of eligible annuitants at June 30, 1960 (3,706), will be reduced by 17 each month, based on the most recent attrition experience, and applying the $10 per month across-the-board increase, granted by the law to the remaining number of eligibles. The total 1961 cost increase under this computation is $433,500 of which amount $18,500 can be covered with the existing limitation, thereby leaving a net remaining requirement of $415,000. Mr. THOMAS. Do you have a prepared statement for us? Mr. THOMAS. Put it in the record and then summarize it. Tell us what it is all about. (The statement follows:) Mr. Chairman and members of the committee, the Canal Zone Government and Panama Canal Company are requesting supplemental appropriations for fiscal year 1961 as follows: Canal Zone Government operating expenses Increase in pay of unskilled and semiskilled employees and teachers in Latin-American schools___ Increase in pay based on increases provided by Public Law 86-568_ $160, 500 430, 700 33, 800 Total. 625,000 |