THE U.S. invasion of the NMI in 1944 obliterated the islands’ thriving economy. For the next 30 years, government — big government — became the main “industry.” A 1966 report commissioned by the Interior Department stated that under the U.S. administration, many islanders “were employed in [government] positions for which they did not qualify, and neither funds nor personnel were available to provide the necessary training or supervision to enable them to learn to do the assigned jobs. Productivity and performance on many programs were low, and costs…high….” When the Trust Territory government budget was increased by the U.S., the result was “a new surge of government.” The additional funding “was generally used for doing about three times as much of the same kinds of things, in the same general ways in which they had been done during the previous decade” of U.S. rule.
In the TT days, the government budget was mostly for payroll. According to the late economist William Stewart, the government would hire local residents, “and they’ll sit at a desk, won’t be very much to do, but we just can’t have them going out sitting under a coconut tree somewhere. They’re going to have to sit there eight hours a day and do the typing or push the paper or whatever it was that had to be done in order to justify this pay.”
In 1978, after looking into the U.S. administration of the NMI and the rest of the Trust Territory islands, the Washington Post reported: “31 years of American trusteeship in Micronesia has created a society dependent on government jobs and benefits, island welfare states whose people are so inundated with free handouts that they are abandoning even those elemental enterprises — fishing and farming — that they had developed before the Americans came. ‘We’ve smothered them,’ agrees a veteran U.S. administrator with the Trust Territory government, ‘and it will take them a long time to come out from under this blanket.’ ‘It is awfully hard to see anything good that the United States has done in Micronesia,’ adds another American who has spent years here.” Regarding government work: “[It] is easy, the wages excellent by island standards, and the bosses undemanding. ‘They’re really not required to do anything,’ says…a Palauan businessman and politician. ‘They know they’ll get their paychecks no matter what. No one takes attendance to see if they show up. They’re not accountable for any mistakes.’ An American agrees…. ‘It sort of reminds me of a small southern town in the U.S. where the courthouse crowd has everyone on the county payroll and they all just sit around the courthouse lawn all day.’ ”
Back then, a Micronesian lawmaker said the islands were facing a “dangerous situation,” which was the lack of economic development. “Day by day,” he said, “we are becoming more dependent upon others and less capable of self-reliance. We may even be at the point of no recovery.” He noted that the Trust Territory islands had one of the world’s “highest dole-outs” and an army of “extravagantly paid people,” and yet they were moving backward economically.
Today, some may say that for the current CNMI administration, we’re not moving backward fast enough — but that’s another subject. Recently, in any case, the governor said if the government could not collect additional revenue, he may have to “make adjustments.”
He has to. Many members of the public will oppose tax hikes in this bad economy. And even if tax hikes are imposed by lawmakers who fear the governor more than their constituents, there’s no guarantee that additional revenue will be collected. It is likely that the affected (and already struggling) taxpayers — businesses and consumers — would make their own “adjustments.” The government could end up collecting less, not more, revenue.
Hence, the governor will still have to “make adjustments,” and a good place to start is by re-reading the 2020 Fiscal Response Summit report, which made the following cost-cutting recommendations:
• The cancelation/postponement of the retirees’ 25% benefit.
• The consolidation of several departments and programs: merging the Office of Youth Affairs with the Division of Youth Services; Fire, Public Safety and Corrections; the Office of Grant Management and the Department of Finance; the Department of Public Works and the offices of the mayors; the Departments of Commerce and Labor; Finance and Commerce; the Division of Parks and Recreation and the Department of Public Lands; the Northern Marianas Technical Institute and Northern Marianas College; the Department of Lands and Natural Resources and DPL; the elimination of all non-federal positions in Agriculture and Fish & Wildlife; the elimination of zoning; and the reduction in the size of the Legislature — from 20 representatives to 10, and from nine senators to six.
“This is something that our Commonwealth should have done a long time ago,” said the then-lt. governor, who is now the governor. Early last year, he told reporters: “Everything is going to be on the table…. [T]o continue spending at the level that we were spending…it’s just not sustainable now… At this point, we are in such a dire situation that nothing should be taken off the table.”
Chop chop.
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