By Zaldy Dandan
Variety Editor

THE commonwealth government is now practically bankrupt. Its financial problems have been getting worse since the local economy began its freefall in 1998, but CNMI elected officials never adjusted their spending habits. Expenses continued to exceed collections until there wasn’t even a bottom left to scrape in an already empty barrel. So now, excuse me as I shift metaphors, even the “sacred cows” have to be touched — public health, public safety and public education.
Some public school teachers say the government should impose a new tax, like a sales tax, to raise revenue for PSS. This presumes the existence of two non-existent things: 1) a willingness on the part of the government to spend any additional revenue on PSS; and 2) consumers and businesses that can afford to pay more taxes.
The government has so many financial obligations that it no longer pays rebates and has long emptied the rebate trust fund, which was supposed to be untouched. It has stopped paying the Retirement Fund and most of the government vendors. Its priorities, as this administration has earlier admitted, are payroll and CUC’s fuel payments. Considering how bad the economy is, any additional revenue that can be raised by a new tax will be less than a drop in the bucket. And this is assuming that a new tax can be imposed on an increasingly miserable population and businesses that can’t even afford to pay its workers $3.05 an hour. Consumers are already complaining about current prices and businesses don’t want to further raise prices because they may end up with fewer or no customers. You cannot squeeze water from a rock. You cannot draw blood from someone with anemia. You cannot further tax an already impoverished public.
There is no problem with the CNMI’s tax system. It is good not only for businesses but also for ordinary taxpayers. The problem is the CNMI government’s mindless and wasteful spending habits. It’s not just that it doesn’t have enough funding for PSS, Public Health and DPS. It doesn’t have enough funding for anything, period.
And yet no one among its officials want to deal with this reality. All of its branches and agencies want to be exempted from budget cuts. The judges and principals don’t want paycuts, and even the commerce department and the Saipan mayor’s office want to be considered “essential” agencies for crying out loud.
Which are nonessential then, and where can the government get the money that doesn’t exist?
Meanwhile, households and businesses are cutting down on their utilities and other expenses. Companies have reduced work-hours and payroll. A lot of workers who are paid $3.05 are now getting less. The public, which foots the bill of this wasteful government, is coping with an economic meltdown, but the very entity that has made it worse wants to be exempted from its consequences.
No way. The government has to further cut its spending because it doesn’t have enough money.
All its branches and agencies have to accept this painful fact. If they don’t want their paychecks cut — and who does — they should identify other areas where cuts can be made. They have to give up most of their perks, for example. The government, moreover, has to turn off its air-cons and switch to electric fans and drastically reduce gasoline allowances. Services and programs that can be done better by businesses should be privatized. It is time to consider school vouchers as well as an independent study to identify agencies with duplicate functions and whose findings must be implemented.
Reducing the number of legislative seats or having a part-time Legislature won’t solve anything. As those who pay attention to how the CNMI government has been conducting “business” all these years, cosmetic changes in its structure do not result in savings. It’s like the carnival game, hit-the-gopher-on-the-head: however you bludgeon away, the gopher’s head will always appear in another hole. Cutting the number of legislative seats and making lawmakers “part-timers” will simply allow the executive branch to spend more on personnel, which will now include part-time legislators and their staff.
The problem is fundamental. The CNMI government is expected to be Santa Claus and a recruitment agency for voters all year round. This has to end. What the CNMI now needs is not more government spending, but more investors that can create good-paying jobs for locals. And this, unfortunately, cannot be achieved in the blink of an eye. It will take time. But the first step has to be taken by the government. It has to step out of Lala Land and get used to the real world where people don’t order steak when they can only afford soba.

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