You can’t ignore basic arithmetic
THE CNMI government’s main problem is not really the bad economy, but its refusal to make significant spending adjustments based on the actual revenue it is collecting. In 2019, prior to the pandemic, the CNMI had three main tourism markets: Korea with 249,211 arrivals; China, 185,526; and Japan,17,121. Last year, those numbers were 76,456, Korea; 2,130, Japan; and 186, China. Based on the latest figures from MVA, as of Oct. 2023, there had been a total of 179,661 arrivals so far this year: 159,315 from Korea, 7,373 from Japan, and 1,289 from China. Korea, the main market, is slowly but finally recovering, but China arrivals are still way down, and Japan’s numbers — which have been decreasing since 2013 — are woefully inadequate.
Clearly, the revenue the CNMI government can collect from the current arrival rates will not be enough to pay for all its current obligations. The administration’s preferred “solution” is 1) to rely on U.S. military assistance/spending, which is supposed to be forthcoming, any moment now; and 2) tap “new tourism markets,” as if those could be willed into existence by the power of positive thinking.
In the meantime, how can the CNMI’s big and bloated government meet payroll, pay its employees’ life and health insurance, remit regular payments to the Settlement Fund, including the retirees’ (non-court mandated) 25% benefit, provide funding for the medical referral program, scholarships, utilities, among many other things (never mind the payments due to government vendors)?
That is the question before the CNMI’s elected officials.
Their answer is to impose new or higher taxes/fees on already struggling taxpayers so the government can project (imaginary) additional revenue to justify its current (personnel) spending levels.
This is not just “business as usual,” but dereliction of duty as well.
You can’t spend money you don’t have
“WE need to do something,” said one of the lawmakers during their recent meeting with HANMI and the Saipan Chamber of Commerce.
HANMI and the chamber said reviving the China market can boost tourism arrivals. To address the U.S. government concerns, they recommend the implementation of a pending DHS rule that would establish the CNMI Economic Vitality Security Travel Authorization Program. This should allow prescreened nationals of China to travel without a visa only to the CNMI under specified conditions. The goal is to “create firm safeguards against overstaying visitors or any potential future rise in birth tourism, as existing flights would be operated and controlled by travel groups that could be held accountable for their passengers.” HANMI and the chamber also recommend a ban on CWs from China.
Meanwhile, because of the painfully slow recovery of the tourism industry, a HANMI official said Saipan is losing key retailers that support tourism. “When brands are seeing that [tourists are] not coming back, they may not either. So it’s scary…the amount of [tourism] infrastructure we’re losing rapidly. And so I hope we can turn this around before we can lose much more…. But if we don’t do anything to address this, we’re going to lose a lot of [what] allows us to attract higher spending customers.”
Again, if the administration prefers to rely on one tourism market only — Korea — while hoping that other tourists who are not from China will also visit the CNMI in the tens of thousands, someday soon, then that’s fine, too — as long as the government spends only what it can collect from a sputtering economy.
Everyone else is making painful adjustments to the CNMI’s dismal economic reality — everyone except the government. That’s not right. If you can’t collect enough then don’t spend money you don’t have.
