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    Wednesday, July 17, 2019-1:05:54A.M.

     

     

     

     

     

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Editorials 2019-June-21

The goal

A BURGLAR wouldn’t break into a house if he knows there’s nothing inside to steal.

On a not-so-unrelated note, just three months ago, Imperial Pacific International announced losses amounting to $378 million and a 58 percent drop in revenue. So, according to some elected officials, let’s collect an additional 10 percent tax from IPI.

This begs the question. What should be the government’s goal right now? Is it to raise more revenue or to impose an additional burden on a struggling business entity? Both? But how do we expect a business entity — or anyone for that matter — to pay more when it is incurring losses? And why do we want to further increase the costs of doing business in a place where, right now, many businesses are still recovering from Yutu and/or barely keeping their heads above water? The lingering uncertainty over workforce and other issues that affect the local economy also doesn’t help.

If the goal is to collect more revenue, then the economy must improve. We need to boost tourist arrivals and allow investors that are already here to complete their development projects. How? That’s the question, we hope, some CNMI officials can answer.

Good luck retirees?

SEVEN years ago, the “looming” depletion of the NMI Retirement Fund, which had filed for bankruptcy, was the biggest issue of the day. Duly elected CNMI officials then decided, through legislation, to legalize casino gaming on Saipan so that the government could have a new revenue source for its retirees’ pensions. (Incidentally, then and now, voters opposed to casino gaming can campaign for its repeal through the election of anti-casino candidates or the referendum process.)

In Nov. 2015, Best Sunshine (now IPI) opened its casino at DFS. In Sept. 2017, the Settlement Fund trustee reported to the federal court that the CNMI government, “in the past two years,” had been making weekly payments of $1 million, “partly because of…Saipan casino gross revenue tax” collections. The casino gross revenue tax “has developed into a primary source of revenue for the government.” The government’s ability to “make…large weekly payments eased the Settlement Fund’s liquidity requirements, allowing the Settlement Fund to invest its money for longer periods.” The existence of the Fund, which was expected to be depleted by 2014, “may be extended to 2024” if the government “continues to make timely and periodic payments.” (The trustee also said that reliance on casino revenue “is very risky,” and the CNMI should “diversify” its revenue sources.)

We should also remind ourselves that the Settlement Fund owns a consent judgment amounting to $779 million which the Fund may enforce against the CNMI government in federal court if the Commonwealth fails to timely pay its obligations due under the settlement agreement.

Now that the economy has slowed down, again, and austerity measures are in place, again, we should ask lawmakers: Is it still the Legislature’s priority to pay retirees what their government owes them? Besides IPI, do lawmakers think the government has alternative revenue sources that can be tapped right away? What are they? Now if lawmakers believe that the problem is IPI’s existence itself and/or casino gaming, then they should say so for the sake of “transparency,” and propose the appropriate measures — a repeal of the Saipan casino law, for example — so we can begin the discussion on, say, raising more taxes and/or charging more fees; shutting down government offices; laying off government employees; or how exactly can the government throw its retirees under the bus.