Rep. John Paul Sablan
THE 3% tax that will be imposed on construction activities proposed in House Bill 23-74 can fund the operations of the Legislative Bureau, according to the chair of the Saipan and Northern Islands Legislative Delegation, Rep. John Paul Sablan.
In an interview on Monday, Sablan said the delegation can appropriate funds for LB’s operations, but the bureau serves lawmakers from all the senatorial districts and receives allotments through Commonwealth law.
What he is counting on right now for LB’s operations is the 3% construction tax measure that is still on the desk of Gov. Arnold I. Palacios, Sablan said.
He said the construction activities on Tinian and federally funded projects on Saipan and Rota are expected to generate up to $20 million in construction tax in fiscal year 2025 if the governor signs the bill into law.
In a meeting in August, Senate Vice President Donald Manglona asked Finance Secretary Tracy Norita if she was confident that their projected government revenue numbers could be collected in this fiscal year.
She said, “I would say at this point that these are just high-level assumptions.”
Norita said there are “so many factors” that can affect a construction project. “What would give us more confidence is the actual passage of the legislation and actual collections and then, from there, we would have a real basis to forecast,” she added.
Authored by Rep. Ralph N. Yumul, H.B. 23-74, as amended by the Senate, would impose a 3% tax on construction projects worth $350,000 and above.
Sablan said once the governor approves H.B. 23-74, the FY 2025 budget is likely to be revised.
Last week, LB Director Perry John Tenorio brought to the attention of Senate President Edith Deleon Guerrero and Speaker Edmund S. Villagomez the lack of funding for LB’s operations in the fiscal year 2025 budget. He said this “will severely handicap” the bureau’s ability to function effectively.
In the government’s FY 2024 budget, $579,295 was allotted for the LB’s operations.