WITH the local tourism industry still in limbo and the CNMI government more reliant on federal financial assistance, the recent changes in the Pandemic Unemployment Assistance eligibility rules may not be good for the islands’ struggling economy, Finance Secretary David DLG Atalig said.
In his report for the second quarter of fiscal year 2021, Atalig told Speaker Edmund S. Villagomez: “Recent changes in the eligibility criteria for PUA relief may have pronounced impacts on business gross revenue receipts as businesses may not be able to retain the employees necessary to support operations.
“Under the current guidance provided to the CNMI government, employees under reduced work hours or who have been furloughed from employment are no longer eligible for PUA payments.
“With the anticipated influx of funding from the American Rescue Plan Act, the CNMI government can expect to have [its] furloughed employees back to work and all government employees to 80 hours.”
However, he added, “businesses may choose between resuming regular employment schedules, reducing hours leading to less disposable income for employees and terminating eligibility for PUA, or terminating employment [to] provid[e] former employees with eligibility into the program.”
Atalig said the “individual consumption patterns that arise from any of these choices will likely have an impact on revenue garnered through the remaining quarters of this fiscal year.”
He added that while “federal assistance in the form of Pandemic Unemployment Assistance has supported consumption expenditures despite the widespread impact of Covid-19 on the CNMI labor market, the data from [the second quarter] showcase continual impacts on the wider economy outside of domestic consumption.”
He said under “normal circumstances, the tourism industry increases overall demand for goods and services in the CNMI by greatly expanding the consumers present on the island at any given time. This increase in population caused by transient visitors provides additional consumption, increased business revenue and a demand to necessitate further import to serve as the basis for excise taxation.”
Atalig said because of the “announced partial resumption of tourism through a proposed charter flight from South Korea, levels of commercial activity are anticipated to increase; however, the restrictions placed on travelers and the size of the planned resumption will not be sufficient to realize pre-Covid-19 levels of economic activity anytime soon.”
