Marianas Variety

THE heads of the House Ways and Means and Senate Fiscal Affairs committees say they will be “cautious” in dealing with the Fitial administration’s revision of the fiscal year 2013 budget.

Ramon Basa

Sen. Jovita M. Taimanao, Ind.-Rota and chairwoman of Fiscal Affairs, said the people should not expect too much.

“Let us dream small and fulfill it instead of dreaming big that will remain a dream,” she added.

Members of the House Ways and Means Committee met yesterday afternoon after receiving Gov. Benigno R. Fitial’s revised FY 2013 budget proposal that increases the revenue projection from $102 million to $114.3 million.

The administration said it wants to use the projected increase to “revamp our existing retirement program, restore efficiency in government operations and maintain our commitment toward continued funding to the NMI Retirement Fund.”

The revised budget calls for the transition of all active government employees into  U.S. Social Security and the lifting of austerity measures by restoring the 80 working hours of government employees.

Fitial also wants an additional $1 million for the local Medicaid matching fund; $2.1 million for medical referrals; and $11 million the Retirement Fund.

Basa and Taimanao both agree that lifting the austerity measure and helping the Fund should be the top priorities.

Acting Speaker Felicidad T. Ogumoro, Covenant-Saipan, in a separate interview, said they should also  focus on very urgent matters like healthcare services and public safety.

Basa said the Department of Public Safety should also get additional funding to ensure tourists are safe on island so that the increase in tourism revenue will actually be realized as projected.

Ogumoro said the budget revision is very timely because the House plans to act on it on Friday.

Basa said they will have to amend the House concurrent resolution to reflect the additional $12 million in projected revenue.

Caution

Asked what he thinks of the increase in projected revenue, Basa said: “I am elated because of the additional resources, at the same time I am very cautious because I need to look at where the new resources are coming from. Believe it or not, our tourist arrivals have gone up in the past few months and the [administration] projected it is going to be the same in the next fiscal year, and as a result it will jack up our tax collections.”

But Basa said they still have to look carefully where the additional money is going to be allocated. His committee also has to know exactly how the administration came up with the $12 million increase in revenue projection.

“I always like to think positive and I think we are seeing a rebound in the economy despite the sad news about  Saipan Air, which is no longer going to materialize, but…we still need to be cautious.”

For her part, Taimanao said the government should continue to be aggressive in collecting taxes to meet the projection. Instead of increasing taxes, she added, all the government has to do is to consistently monitor the collection of taxes.

Anticipated gains

According to Fitial’s budget revision, the anticipated gains in FY 2013 revenue are from the business gross revenue tax, wage and salary tax and hotel occupancy tax.

From $46.2 million as the administration projected in its submission last April, the BGRT projection went up to $57.2 million, an increase of 24 percent. The income taxes projection increased from $35.3 million to $36.3 million or a 3 percent increase, while the “other taxes” went up from $26.7 million to $27.6 million or a 3 percent increase.

The $7.4 million to be collected from government fees, the $2.4 million in charges for services and the $2.6 from “other revenues” remain the same.

All this will give the government $133.6 million. Once the debt service appropriations, earmarked funds, and other legal set-asides are deducted, there will be $121 million in available resources.

But this will be further reduced by $1.9 million in Compact-Impact reimbursements and the $4.7 million that will be transferred  into non-general fund sources.

The transition of all active government employees to U.S. Social Security is expected to reduce the employer contribution for the defined benefit members from 37.37 percent to 6.2 percent.

Fitial said the positive effect of the transition will mean more disposable income spent in the local economy. It will also save the government 31.19 percent in employer contribution and prevent the unfunded liability from growing further.

Fitial at the same time said he will continue to encourage the Legislature to pass other revenue-generating measures.

He also urged “close collaboration” with the business community to ensure concerns are appropriately addressed and mitigated prior to the implementation of Public Law 17-75 which imposes a $15 fee on transient hotel occupants. This money, the governor said, “will be geared toward the vigorous promotion of NMI as a clean and safe destination.”

He added, “Although the failed launching of Saipan Air will retard any increase in the number of seats arriving directly from China and Japan markets, our focus is to mitigate what was to become a reality by looking at our available alternatives such as providing incentives to those airlines with commitment to increase the number of seats to the NMI.”

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