Employees at full salary will continue to patronize all the retail outlets in the private sector, which will generate business gross receipts taxes, as well as revenue from fees and other taxes. Employees with less than full salary won’t have the funds make purchases at the local retail outlet to the same extent. Thus, the income to the government in the form of BGR and related fees and other taxes will go down when its employees receive only partial salaries. Paying employees only a partial salary will save the government some money. But it will also decrease revenue. At some point the net gain will be larger from keeping fewer employees on full time. Has anyone calculated at what stage that occurs? How many employees one could let go and still obtain a net gain in revenue? Shouldn’t such figures play a role in the decision as to whether employees should be put on partial salary, or taken off payroll — and how many of which?
There are, of course, a myriad other trade-offs to consider, but has anyone really looked at all the pros and cons? added up the figures? made the calculations? Where is the proof that keeping employees at less than full salary is more beneficial to the economy than keeping fewer employees at full salary?
Another calculation that would be useful in today’s economy is a closer examination of benefits available to off-island professionals who are recruited for contractual work on island. Take the Tinian doctor’s position, for example, allegedly rated at more than $100,000 per year.
If one were to take the costs to that doctor of practicing on the mainland, not only in terms of housing, and heating, and seasonal clothing changes, but also in state and federal taxes levied on his salary — and perhaps local sales tax, property tax and who knows what else, and compared those to the costs of housing, maybe air-conditioning, and only one season — with no federal tax, surely the equivalent net costs would be far lower on Tinian, and would be matched by much less than a $100,000 salary.
The only fair way to justify high off-island salaries is to consider the specifics. Taking the candidate for Tinian MD at $100,000 per year as an example, what was his/her net income after federal, state and local taxes, housing, utilities in the specific place he formerly worked? Then calculate the net income if given the same salary on Tinian. It would probably be thousands and thousands higher! That’s where the disparity, the unfairness occurs.
But does anyone take those factors into consideration in awarding salaries to mainland doctors — or other professionals? Why not?
There should be a formula developed within the Office of Personnel Management that takes those specific localized differences into account, in awarding salaries to off-island hires. Yes, housing is a problem (because of off-islanders’ inability to obtain mortgages), and yes, housing should therefore probably be provided, but there is a need to take the other factors into account as well, if the CNMI is going to bring some sort of sanity — and equity — to the whole picture of professional off-island hires and their contracts.
I’m admittedly mathematically challenged, and it may well be that I am missing some perfectly obvious factor(s), but on principle, it does seem me that decisions in these areas are not being made with much logic, or hard data.
RUTH L. TIGHE
Tanapag, Saipan
