If the government’s cashflow problems persist, “imagine what the next two pay periods are going to be like — it’s going to be the same.”
Inos said they must announce payless Fridays as early as possible because they are unavoidable.
“We don’t want to come out in the last minute just to tell them that there will be no paychecks,” he added.
Inos explained that the gross revenue tax is paid within 30 days after the end of the quarter, which is this month.
He said the government’s shortfall is $1.4 million.
But there is about $1.5 million for the critical departments and a little over $1 million for the Public School System and Northern Marianas College, he added.
In a statement, Press Secretary Angel Demapan said the continued decline in cash flow will “cause the government to halt the Sept. 10 payroll.”
Similar to the delayed payroll experienced last June 18, Demapan said only government personnel classified as performing “critical services” will receive paychecks this Friday.
They are the emergency personnel from the Department of Public Safety’s police and fire divisions, the Department of Public Health, the Department of Corrections and the Division of Youth Services’ Juvenile Detention Unit.
Federally funded employees can also expect to receive paper checks on time, Demapan said.
All other personnel paid out of the general fund will receive paper checks as soon as there is enough cash available, he added.
He said due to the decrease in cashflow along with the commonwealth’s bond payment of $1.3 million and the scheduled release of some $1.6 million in appropriated funds for recipients of the CNMI scholarship and the Saipan Higher Education Financial Assistance programs, “it has been determined that the government’s ability to meet its payroll obligations for this Friday will not be possible.”
He added, “There will be no direct deposits and automated clearinghouse allotments for all employees, including those considered ‘critical services.’ Thus, employees will have to physically satisfy their third-party obligations normally processed electronically with their respective financial institutions.”
Employee deductions for retirement, both defined benefit and defined contributions, health and life insurance and other allotments paid by check will still be taken and paid through the normal process, Demapan said.
He said the decline in resources and collections continues to take its toll on the government’s ability to meet its obligations.
