Saipan Chamber of Commerce president James T. Arenovski, in a letter to the Legislature, said while House Legislative Initiatives 16-12 and 16-14 seem to promise an easy solution to a long-standing and serious problem, they are not the correct solutions.
Both are proposals to amend the CNM Constitution and, if passed by the affirmative vote of three-fourths of the members of each house, still require the approval of voters.
“Inasmuch as the vast majority of dollars needed in any solution — including for the repayment of bond debt — will come from the private sector, we think that the Legislature and past and future retirees should bear some of the burden,” Arenovski said.
The authorization of public indebtedness will open a Pandora’s Box, he added.
“We are facing a utilities crisis — couldn’t the issuance of additional bonds help solve that problem as well? If these initiatives are passed, we fear our community will stop searching for the right solutions to problems and instead rely on the easy solutions,” Arenovski said.
He said while the chamber believes that the Retirement Fund has been working diligently to address the issues facing the agency, it is not clear if lawmakers have accepted their own responsibilities.
“There are options that we think would significant improve the long-term outlook without necessitating the kind of drastic measures proposed by these initiatives,” he said.
Lawmakers, he added, should consider reducing the retirees’ benefits.
He said this sort of action “would only require legislative fortitude and not the voters’ approval.”
Before “mortgaging the children’s futures,” Arenovski said, “perhaps the public first should be asked whether the accrued benefits language of the Constitution should be considered so that some of the excessively generous and expensive benefits conferred by the legislatures in the past might be reduced to a level that is commensurate with CNMI’s fiscal abilities.”
He added, “While this will certainly meet with disfavor among those who are currently benefiting from the largesse of previous legislatures,” it can be framed as “a choice between reduced benefits or no benefits at all.”
Arenovski said the chamber believes that there are “a number of alternative options to incurring an enormous public liability that will outlast many of the individuals who are debating it.”
“These other options must be attempted before the chamber can support an amendment to the Constitution’s restrictions on public debt which restrictions are likely the only remaining protection from the effective bankruptcy of our government,” the chamber president said.
