By Moneth G. Deposa
Variety News Staff

THE administration claims that it has generated a “budget surplus of over $10,000 as a result of strict and aggressive expenditure controls” while admitting the need for more spending cuts.
Gov. Benigno R. Fitial, in his unaudited government financial report to the Legislature, said he wants the current fiscal year budget of $213 million adjusted “consistent with more recent and realistic revenue projections to address the projected shortfall in the current budget.”
He said he has instructed Finance Secretary Eloy Inos and Special Assistant for Management and Budget Tony Muna, to perform a review of the FY 2007 budget and to report their findings immediately.
According to Fitial, tax collections were $5.8 million less than projected even with the inclusion of the $6 million in cover-over funds received from the federal government.
These funds are the income taxes the federal government collected from U.S citizens in the CNMI which are supposed to be remitted to the commonwealth government.
The CNMI is claiming about $60 million in “cover-over” taxes.
Fitial noted lower than projected collections in garment user fees, excise taxes, and wage and salary taxes.
He said the Japan Airlines’ pullout that took place in Oct. 2005 had a significant adverse impact on the tourism industry, which affected business gross revenue receipts and employment.
On the expenditure side, he said the government’s obligations and expenditures including debt service totaled $207.11 million.
This was $1.87 million less than the approved allotments, Fitial said.
The Commonwealth Health Center collected $3.9 million less than its projection, but this was offset by $10.5 million in emergency transfers from other funds and agencies pursuant to the governor’s emergency declaration and reprogramming authority.
Fitial said general fund revenue collections and other finance sources were $1.858 million less than projected.
“This is a very challenging and difficult year for the government and for sure we will lose a significant amount of revenues and other fees which may result in a budget shortfall,” said Press Secretary Charles P. Reyes Jr.
Still, according to the governor, “a balanced budget was achieved” in FY 2006.
His report stated that revenue collections for FY 2006 totaled $207.125 million while recorded expenditures and obligations reached $207.114 — “resulting in a surplus of $10,519.”
Fitial said “the positive year-end balance was influenced by the suspension of Retirement Fund employer contributions authorized under Public Law 15-15.”
According to Reyes, “although we come up with a very small surplus…this is still good news because it’s the first time in 10 years that we did not incur a deficit in spending and that’s very significant. We were able to do that because of the federal cover taxes of $6 million.”
The governor admitted that there is still much work to be done to bring fiscal discipline into the day-to-day operations of the government.