Marshalls biggest budget endorsed, quarterly resident payments begin

BY GIFF JOHNSON
Marshall Islands Correspondent

MAJURO, Marshall Islands — The Marshall Islands Nitijela (parliament) approved its largest-ever national budget in September, setting in motion plans to spend $769,342,435 during the fiscal 2026 year that started Oct,1.

The nearly 10% increase in funding above the $725 million budget of 2025 comes from a jump up in funding through the Compact of Free Association with the U.S and funding for multiple development and infrastructure projects supported by the World Bank and Asian Development Bank.

Finance Minister David Paul, in an interview, called the FY2026 budget bill a “watershed moment” that continues investments in projects and programs while “transitioning to a new frontier that is more people focused.

“We have two major challenges: Inflation and out-migration,” he said. “Government doesn’t have all the answers, but we can emphasize policies, such as tax reform, to put more money in people’s pockets to help people handle it (inflation) better.”
The new budget sets in motion: Universal Basic Income system quarterly payment program, $27 million. This will provide every Marshallese citizen residing in the country with about $200 per quarter.

Extraordinary Needs Distribution funding for 11 atolls/islands, with a significant portion aimed at providing supplemental food supplies and home renovation support to local communities, $20 million. This is funding that is generally aimed at islands affected by U.S. nuclear testing, although the U.S. State Department vetoed any mention of “nuclear” in the renewed 20-year funding agreement that passed the U.S. Congress in 2023.

A new breakfast healthy snacks program for all public schools, $3.1 million, and school lunch program, $4.8 million. The government has provided a school lunch program for a number of years. But the launching of this new breakfast program harkens back to the late 1970s and 1980s with all public schools having food service programs to provide meals to students — and reflects an attempt by government to reduce the rampant malnutrition among young children.

Social Support Program, launching the soon-to-be established non-contributory social security program for retirees and people with disabilities, $780,000. This program aims to provide eligible individuals with a monthly stipend of $100.

Ongoing support for the Early Childhood Development program, funded by the World Bank, that includes regular stipends paid to mothers of children from birth to five years of age, $20 million. This program has directly targeted a high rate of malnutrition and stunting in Marshallese children.

Outer island runways, docks, and seawalls as well as investment in the power plant repairs and operations for Kili Island, home of displaced Bikini Islanders, $11.6 million.

Demonstrating the dependence of the Marshall Islands on donor funding, more than 80% of the budget is accounted for by donors. The main funding streams for the Marshall Islands are: Locally generated revenue through the government’s General Fund, $123.6 million, Compact of Free Association, $373.3 million, U.S. federal grants, $19.4 million, Special Revenue Funds, $12.5 million, and Taiwan capital projects, $10 million.

Other development assistance, $227,469, 834. The “other development assistance” is largely from World Bank ($130 million) and Asian Development Bank ($93,500,000) grants.

In tandem with the large budget for fiscal 2026 are a series of proposed tax overhauls to modernize the tax structure, including establishing a net profit tax for businesses, similar to the tax system now in place in Palau. mbj