GOVERNOR David M. Apatang on Tuesday submitted to the Legislature a revised fiscal year 2026 budget significantly higher than earlier anticipated. Finance Secretary Tracy B. Norita attributed the increase to income taxes collected from the construction industry.
On Sept. 23, 2025, the governor informed Senate President Karl King-Nabors and Speaker Edmund S. Villagomez that due to a decline in tourist arrivals, reduced air service, and broader market uncertainties, the FY 2026 revenue forecast had been reduced from $179.6 million to $156.7 million, as indicated in Public Law 24-14.
With $156.7 million in budgetary resources projected for FY 2026, only $104 million would have been available for appropriation. Apatang issued Directive 2026-8, which included austerity measures, such as reducing government work hours to 70 per pay period, unpaid holidays, and a potential reduction in force.
The Public School System, which initially stood to receive $31.7 million, was preparing to declare a state of emergency and consider legal action over the government’s failure to meet the constitutionally mandated 25% allocation.
In a press conference on Tuesday, the governor and Lt. Gov. Dennis James Mendiola announced that the FY 2026 revenue forecast had slightly increased to $158 million, with $138.4 million available for appropriation. The governor confirmed that austerity work hours would continue for government employees, but holidays would now be paid, and PSS funding would rise to $37.7 million.
Norita explained that finalizing the fiscal year 2025 fourth quarter report revealed year-end revenue collections had exceeded forecasts by 5%, rising from $159.6 million to $167.3 million — a $7.7 million difference. “This increase mainly comes from income taxes collected from the construction industry,” she said, noting that $3.7 million of the additional funds were now included in the revised budget.
Apatang added, “Luckily, Santa Claus came around at the end of the fiscal year and gave us a little more help so we can provide PSS additional funding, as well as other agencies like Northern Marianas College and Marianas Visitors Authority that need more funds.”
Mendiola said the fourth quarter revenue collection introduced complexities into the FY 2026 budget. “That was why Finance, together with the Office of Management and Budget, worked late last week through Monday to finalize the revised budget with the additional revenue that was realized,” he said.
In his letter to King-Nabors and Villagomez, Apatang emphasized that the CNMI continues to face economic challenges due to slower tourism recovery, declining arrivals, and reduced air service, which have impacted tax collections. These factors are reflected in Finance Secretary Norita’s report, showing a reduction in projected revenues from $179.7 million to $158 million.
Commissioner of Education Dr. Lawrence F. Camacho expressed gratitude for the opportunity to collaborate with the administration. “The governor understands what these numbers mean for education,” he said. “Of course, we are not going to receive the entire $48 million we requested, but we understand the current economic conditions.”
Camacho said the revised allocation of $37.7 million is an improvement over the previously proposed $31.7 million, though PSS is still hopeful to reach $40 million, a target the governor has indicated he is committed to achieving. “What delighted me most is the opportunity to collaborate with the administration, and we are hopeful we can work together with the Legislature,” Camacho said.
He added that it was reassuring to see education prioritized by the administration, even amid limited financial resources. “That was one of the best things to hear,” Camacho said.
