Don’t
ACCORDING to the Finance secretary, the administration has “reduced executive branch employee hours to 72 hours per pay period, vacated rental spaces, disconnected phone lines, returned vehicles, canceled contracts — all to cut costs.”
Clearly, not enough, but it’s a start.
What about the Legislature and the judiciary? Are they implementing cost-cutting measures? What are they? And if not, why not? Surely they — the lawmakers especially — are well aware of the government’s financial condition, which will remain in the pits until the economy improves. When will that happen — if at all — no one knows.
The government, as we’ve said before, has a spending — not a revenue — problem. It persists on living beyond its means. But until when?
Elected officials, for their part, will be tempted to raise fees and taxes. Doing so will allow them to inflate their revenue projections — that is, to spend money, which they don’t have, and may not be able to collect.
But raising taxes and/or fees in this economy is like forcing someone with anemia to donate blood. So don’t.
Don’t make things worse. Don’t cause further harm.
Just don’t
BESIDES implementing significant, across-the-board, cost-cutting measures, government officials should be, for once, more upfront about their inability to pay for all of the government’s obligations. Be honest. Tell your constituents that making regular payments to the Settlement Fund while paying the retirees’ 25% and funding medical referrals, Medicaid, emergency response and public safety would mean less funding for other spending items, including government payroll and operations. Tell them that in this economy, any tax/fee increase is unlikely to result in additional revenue. Hard-pressed individuals and businesses are likely to react in ways that will defeat the purpose of a tax/fee hike.
How to generate more government revenue? Find ways to improve the local economy; boost tourist arrivals; create business opportunities for legitimate investors; ensure the existence of an adequate workforce.
And stop making election promises you know you can’t keep.
Read ‘em and weep
THE “key updates” for the CNMI in the U.S. Government Accountability Office’s latest report are:
• CNMI’s challenge of meeting its financial obligations worsened.
• CNMI faces mounting financial management and reporting problems.
• CNMI’s economy has limited prospects for recovery and growth.
The report also noted the CNMI’s “inability to borrow through capital markets in recent years.” The CNMI, the report added, “has struggled to finance its pension plan. CNMI officials told GAO they are uncertain how the government will meet its financial obligations.” Meanwhile, the local “economy continues to decline with limited prospects for recovery as its tourism industry struggles and its largest casino is closed and unlikely to reopen soon…. With CNMI’s limited
financial prospects and weak financial management practices persisting, CNMI is at risk of a severe fiscal crisis.”
The CNMI’s elected officials will have to make tough choices. They know what they were getting into when they ran for office last year. And if they didn’t, know they do.
They have to prioritize government spending. They have to cut costs. They must not impose additional burdens on struggling businesses and other taxpayers.
