THE death spiral effect of the looming reduction of revenues of the CNMI government continues to hit the news wave. Our expectation of reversing the trend could not be more dismal than our fears that the worst to come is real and the warning is no longer one that could be put on the wayside as if it is a no bother. The main part of the government’s budget is for personnel, and the other part is “all others.” Seventy to 80 percent of the budget pays for salaries and benefits. So, if cost containment or cost conservation is the objective of the austerity program, then it stands to reason that personnel expenditures should be the primary target for this purpose.
The compensation plan of the CNMI government is a dinosaur and it does not represent an objective measure of total compensation that takes into account the depth (more knowledge or skill in a specialized area), breadth (knowledge or skill that extends upstream, downstream, or parallel to jobs), and height (expansion of management knowledge or skill). The only practical objective that I could surmised from reading and analyzing the present personnel rules and regulations covering the bulk of the employees in the CNMI government is that it is a compensation plan that pays for “membership.” I have yet to ascertain, however, whether the original compensation plan was ever based and structured by a job evaluation study. What this means is that the pay plan is not integrated and it does not have any correlation to what the market pays in the CNMI or comparable market benchmark.
It is important for the administration to begin asking its OPM official for practical solutions on employee pay or compensation plan to soften the blow of the government’s inability to foot the perpetuation of the antiquated pay plan now being implemented. All pay plans are based on the ability to pay. Contracts or regulations are crafted and fashioned so that the availability of funds is a basic condition of employment. If the government has a real and justified assertion about its inability to pay future salaries, then now is more than ever necessary to overhaul the government’s pay plan and incorporate a sound objective that resolves the issues of equitable pay subject to what the market value is and the expected reduction of government revenues.
The recent news indicative of the commissioner of education’s anticipation of laying off some 950 PSS employees because of the anticipated budget shortfall is difficult to swallow. Layoff or reduction in force should be a last resort. What he should have done is to demonstrate to the people of the CNMI that PSS has considered and pursued every imaginable actions necessary to avert the layoff. Since we have not heard that PSS had initiated the option of overhauling its compensation plan, perhaps it will be an issue to be reckoned with and forced the issue on the human resource professional or official under his jurisdiction to do just that. The head ways already gained by the highly qualified teacher competency standard that was mandated by the No Child Left Behind federal statute will serve no meaningful connection to the teachers if the PSS’s pay plan does not integrate such element as a factor in teacher compensation. Even without expressing the detail of the need to retrofit the PSS pay plan, this aspect of the cost conservation or cost containment approach should be the usual investigation and consideration for the officials that handled PSS’s human resource function. The commissioner should establish a more credible ultimatum to the elected officials by showing that his court has done all that is necessary to put his house in order.
The same demand should be imposed by the autonomous agencies in that the human resource official in their outfit provide the professional and competent advise on compensation or pay plan by incorporating an integrated cost containment or cost conservation practice that will permit the agency to sustain the impact of lost or reduction of revenues. It should be noted that the need will require immediate actions and waiting for the situation to self-correct itself is no option. If the human resource official is knowledgeable on compensation or pay plan, the advisory effort should come as a usual and normal course of job responsibility. The timing for changing the paradigm on current pay plan is just as critical for the survival of the autonomous agency.
The cost conservation or cost containment feature of a pay plan could be integrated into a validated pay play by way of conducting job evaluations of the jobs being used by the appointing jurisdictions. A market survey of pay strategies should also be made to determine the equitable distribution of pay rates among job families or professions. Indeed, the results of job evaluations in a regressive economy will have a corresponding downward adjustment of salaries because the aim is to conserve on the limited revenues the government expects to receive in the future. The fact is that we cannot squeeze blood out of a turnip. We all must live within our ability to pay, and the government does not have the same luxury that it used to have a decade ago.
Overhauling the CNMI pay plan, other autonomous agencies included, will be needed before the end of the fiscal year. All new pay plans should take effect for the entire CNMI governmental organization. This is the only way that the administration could implement an across the board cost conservation or cost containment action that will meet the level of revenues anticipated for the immediate future and for all concerns.

FRANCISCO R. AGULTO
Chalan Kanoa, Saipan