When, in the spring of 2007, Senator Frica and Tina Sablan asked the local high court to reduce the number of Saipan House seats from 18 to 14, no one anticipated that the justices, in their infinite wisdom, would mandate an additional two seats based on the 2000 Census even though they knew that the population had decreased since then. (Why didn’t the court simply state that it would not act on the petition until the compilation of new population data? Why did it have to saddle a cash-strapped government with additional costs through a petition that aimed to reduce them?)
The Marine Monument designation was touted by its proponents as the best thing that would happen to the NMI since fina’dene. More than a year later, the CNMI learned that funding for the visitor center would depend on the availability of federal funds, which were unavailable. “Hopefully someday we will realize this project. It’s all about funding,” Congresswoman Bordallo said last February. Well, at least, the NMI did receive free publicity from the Marine Monument designation and it made many tree huggers happy while further securing, some say, the archipelago for the U.S. military.
With federalization, however, the supposed “beneficiaries” are the unhappiest following its implementation. Despite the high expectations of guest workers and their advocates, the federalization law, if not amended or without a new act of the U.S. Congress, will result, starting on Nov. 28, 2011, in a massive reduction of the guest worker population which will finish off what is left of the local economy.
The runoff rule was supposed to ensure that there would never be another minority governor. It was proposed in reaction to the 84-vote winning margin of Uncle Ben in 2005, when he received only 28 percent of the total votes cast. In Nov. 2007, 73 percent of the electorate ratified the runoff rule. Two years later, it allowed a supposedly unpopular incumbent to survive Election Day and secure a majority in the runoff.
I am recounting all this as a reminder to the CNMI’s concerned citizens and policy makers who are considering proposals to raise taxes, impose new ones and legalize casinos on Saipan.
Let’s think about the consequences of any tax hikes or new taxes. Based on the spending habits of the CNMI government, any additional revenue, assuming it can be collected in this economy, will go to its most pressing obligations: payroll and CUC’s fuel. It will mean business as usual: continued hiring of political supporters, more contracts to cronies, and a further delay in making the hard decisions required by the worsening crisis.
It will be like putting out fire with gasoline.
And what about the consequences of tax hikes or new taxes to the community? Higher prices, which will dampen consumer demand, resulting in reduced sales — and revenue for the government. Meanwhile, “underground” entrepreneurs will thrive, depriving the government of more revenue.
Some of those who favor a new tax believe there “doesn’t seem to be any sense here that the money being misspent is their money.” A new tax, according to this line of reasoning, will make taxpayers more concerned about the government’s misspending habits.
The local people, however, have always complained about how their government uses taxpayer money. Their concern is that taxpayer money is being squandered on the chosen few only.
Clearly, the real problem is that most voters and their families work for the government. Hence, there is no enthusiasm for real austerity measures and reducing the size of the public sector. The people are clinging to what they used to get from their government. Elected officials who don’t want to be unemployed will have to impose cuts slowly and incrementally. I also expect them to put on the ballot a pension obligation bond and a constitutional amendment allowing the government to borrow money for operations.
As for the Saipan casino proponents, they are, as usual, overselling it. They want the people to believe that once the casino measure becomes law, the economy will recover and flourish once again. How is that possible? How quickly will the investors come here and build the facility or renovate existing ones? Who are these investors, if they really exist? Will tourists actually come here to gamble when they can go to Macau or Singapore which offer more “attractions”? Tinian passed its casino initiative in 1989. Its casino opened almost a decade later and has yet to earn a profit. Rota legalized casino in 2007 and still has no investors. Both islands have gaming commissions with high-salaried members but they can’t pay their nurses.
This editorial, however, is not a call for inaction. It is, rather, a plea for a more thoughtful approach to these problems. Band-aids will no longer work and there is no quick-fix out there. The CNMI has forever changed and will continue to change. What government leaders should now tell the people is that everyone needs to sacrifice and tighten their belts. Top officials must set an example by volunteering paycuts and passing a law mandating paycuts and benefits. No more new cars every time new officials are sworn in. Minimize gasoline allowances. Reduce if not eliminate the use of air-cons for most government offices. Stop filling vacancies for nonessential positions. Through video-conference, reduce the need for inter-island and off-island travels. Implement a coherent tourism plan that takes into consideration the government’s financial problems. With the help of the feds, create a more stable business environment so that the private sector can hire more locals.
The CNMI can either do what must be done now, or later when painful measures may be too little too late already.
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