THE CNMI government’s revenue collection in the fourth quarter of fiscal year 2024 exceeded the forecast, according to a report submitted by Finance Secretary Tracy B. Norita to the Legislature last week.
Previous quarterly reports indicated that the government failed to meet its projections for those quarters.
This time, Norita said the overall collections in the fourth quarter exceeded the revenue projection by $8.3 million or 21%.
Public Law 23-9, or the FY 2024 Appropriation Act, appropriated a projected $39.3 million revenue collection for the fourth quarter, but the actual collection for the final quarter of the fiscal year was $47.6 million.
The fourth quarter taxes and fee collections exceeded their projection by $2.5 million or 7%, Norita said.
She attributed this “positive improvement” to a “rising economic activity” for the period and the “dedicated efforts” of the Division of Revenue and Taxation’s Collection Taskforce “to ensure tax liabilities are paid.”
She said Finance observed significant increases in several areas: business gross revenue tax, wage and salary tax, and personal income tax revenue, collectively resulting in a 26% increase in collections, amounting to $6.1 million.
The income tax collections, which include BGRT, wage and salary tax, personal tax, corporate tax, gaming jackpot tax and penalties and interest, totaled $29.2 million in the fourth quarter, Finance stated.
The excise tax on cigarettes, beverages and other commodities totaled $5.6 million; the hotel occupancy tax amounted to $1.6 million; and the total beverage container tax, which included soda, non-dairy, beer, wine and distilled drinks, totaled $290,981. The total licenses and fees collection, including amusement machine license fees, was $1.8 million, while the total fees for government services totaled $3.5 million.
Norita also reported the following:
1) As of Sept. 30, 2024, the year-to-date cumulative gross collections equaled $168.3 million, surpassing the forecast of $163.4 million of total revenue prior to transfer-out. The primary cause of this surplus is the Marianas Public Land Trust investment income, which recorded an amount of $5.1 million. However, this has a zero net effect on the available budgetary resources because the interest income was used to pay the balance from the $15 million loan the government obtained from MPLT four years ago.
2) For income taxes, the CNMI government exceeded its cumulative revenue forecast by $14.6 million or 15%, primarily driven by BGRT collections. Additionally, Finance noted a significant increase in collections of penalties and interest from delinquent taxes, which was forecast at $417,107, while actual collections reached $1.2 million or 195% of the projected amount.
3) For the hotel occupancy tax, the cumulative forecast was exceeded by 12%, while the non-aviation fuel’s cumulative forecast was exceeded by 26%. However, these increases were offset by a 30% overall revenue shortfall in other tax areas, particularly excise taxes.
4) For the amusement machine licenses, Finance exceeded its cumulative revenue forecast by $203,780 or 4%, collecting $5.4 million compared to the $5.2 million forecast.
Norita also reported that, as of Sept. 30, 2024, Finance had remitted $34 million in minimum annual payments to the NMI Settlement Fund for retirees’ pensions.
For the Health Network Program (medical referrals), cumulative payments totaling $860,587 were disbursed to the Commonwealth Healthcare Corp. toward the end of the fiscal year.
For the Public School System, a total allotment of $27.8 million was fully disbursed toward the end of the fiscal year.
For the 25% of the retirees’ pension, which the CNMI government has volunteered to pay, the cumulative payments totaled $7.9 million as of Sept. 30, 2024, covering pay periods from Oct. 1, 2023, to March 15, 2024, and from Sept. 15, 2024, to Sept. 30, 2024.
The funding for the pay period from March 30, 2024, to Aug. 31, 2024, was provided by the dividends collected by the Commonwealth Economic Development Authority from the Commonwealth Utilities Corporation, as authorized by Public Law 23-18.
Norita also reported that total disaster expenditures amounted to $414,475.
