Gov. David M. Apatang and Lt. Gov. Dennis Mendiola smile during a press conference Tuesday at the administration building on Capital Hill.
GOVERNOR David M. Apatang on Tuesday asked the Legislature to address unfunded obligations that are compounding the current financial challenges facing the CNMI government.
The government has six days to enact a balanced budget to avoid a partial shutdown.
In his letter to Senate President Karl King-Nabors and Speaker Edmund S. Villagomez, the governor cited the revised revenue forecast from Finance Secretary Tracy B. Norita, which “underscores a significant and immediate challenge that requires the joint attention of both the executive and legislative branches.”
The governor referenced Norita’s memorandum outlining “rapidly shifting economic conditions,” most notably the decline in tourist arrivals, reduction in air service, and broader market uncertainties, which have necessitated a substantial downward revision in revenue projections.
In a press conference on Monday, the governor said the fiscal year 2026 revenue projection has been reduced from $179.7 million to $156.7 million. He noted that the 2% decrease, or $22.9 million, puts the CNMI government at risk of a severe budgetary shortfall if timely adjustments are not made.
Among the most critical unfunded obligations, the governor said the Legislature must address include:
• The NMI Settlement Fund minimum annual payment of $29 million, necessary to avoid default and federal receivership.
• The emergency funding requirement of $40 million for the Public School System, to preserve instructional hours, staffing, and accreditation.
• Northern Marianas College’s constitutional minimum funding of $6 million.
• The CNMI Group Health and Life Insurance Program, with costs exceeding $13 million.
• Medicaid local match requirements, ensuring access to more than $65 million in federal funds.
• Tourism stabilization and recovery efforts, critical to maintaining seat capacity, visitor arrivals, and related revenues.
“These obligations, among others, place extraordinary constraints on the general fund and leave limited flexibility to sustain government operations and essential services,” the governor said. He urged lawmakers to engage immediately in constructive dialogue with his administration to:
1) Revisit and revise FY 2026 budget levels to align with the revised revenue projections.
2) Prioritize mandated and critical obligations to ensure continuity of essential government services and prevent federal intervention.
3) Adopt necessary fiscal reforms to strengthen the Commonwealth’s financial stability in both the immediate and long term, including suspending personnel regulations that limit strategic flexibility for reductions in force.
“The fiscal health of our Commonwealth depends on swift, coordinated, and responsible action. I look forward to working with you to ensure that the people of the Commonwealth are served with stability, accountability, and foresight,” the governor said.
