FOLLOWING a “stunning discovery” of the previous administration’s “mishandling” of federal funds which compelled them to make unpopular decisions, Gov. Arnold I. Palacios and Lt. Gov. David M. Apatang said on Monday that their first 100 days in office had been “very challenging and very humbling.”
Despite the “immense and unprecedented” challenges they faced, their “resolve was undeterred and despite daunting obstacles,” they pledged to “restore trust through integrity, fairness, transparency and fiscal responsibility.”
They reiterated that close to $500 million in American Rescue Plan Act and Community Disaster Loan funds that were intended to support economic recovery and jobs through 2026 were overspent and overcommitted in only 18 months, “plunging the Commonwealth in deep financial crisis.”
Along with financial experts and other Commonwealth leaders, they “partnered to pore over and evaluate budgets and financial reports, revealing significant issues and discrepancies, while [taking] swift action, cutting costs and terminating unaffordable and unsustainable contracts.”
Palacios said the new administration focused on “stopping the bleeding: cost containment and termination of contracts the CNMI could not afford.”
“We’re not leaving [any] rock or stone unturned,” he added. “As we move forward amid these unprecedented challenges, let’s be united.” With “unwavering determination,” he said he and Apatang “will continue to face these challenges, and will continue to foster a culture of hope.”
Ensuring fiscal responsibility
The governor said the implementation of austerity measures as proposed in House Bill 23-31 or the revised fiscal year 2023 budget “is a very unpopular decision that we have to make.”
“It’s something I really don’t like to do but it is the only thing we can do, but hopefully things will turn around in the near future,” the governor said.
He said the Office of Management and Budget, which is part of the fiscal response team, has initiated a revision to the ARPA spending plan with the U.S. Treasury. They have also met with, and sought assistance from federal partners for forensic audits and technical assistance to enhance revenue and taxation capacity.
The governor said federal officials will be visiting the CNMI to discuss with his administration the scope of forensic audits.
Palacios said his administration is improving collections and efficiency while reversing past spending habits.
He said they are focused on ending cronyism and nepotism by ensuring fair and open bidding for governmental contracts, and restoring a merit-based public employment system.
He said they are also initiating investment in professional development as well as training on ethics and workplace rights.
He said they have terminated vehicle and office leases in the executive branch to minimize excessive and unnecessary government expenditures.
They have also limited locally funded travel, and reviewed vacant positions and whether they can be eliminated to fund operations for the remainder of the fiscal year.
Ongoing right now is the streamlining of government functions to increase efficiency and reduce costs, including shared functions between the Department of Lands and Natural Resources and the Department of Public Lands, and the transfer of key functions of the Infrastructure Recovery Program to the Office of Planning and Development, the governor said.
Strengthening ties
Palacios and Apatang also emphasized the importance of strengthening the CNMI’s relationship with the federal government.
The governor likewise noted a collaborative effort between his administration and U.S. Congressman Gregorio Kilili Camacho Sablan to identify new federal sources of funding and opportunities for the CNMI.
Biggest accomplishment
For the governor, ensuring the continuity of the critical services provided by the Commonwealth Healthcare Corp., the Public School System and the Department of Public Safety despite the “fiscal disasters we walked into” is “the biggest accomplishment” of his administration in its first 100 days.
“We look forward to accomplishing more in economic recovery and in putting together a plan and keeping our people safe,” he said.
Apatang said, “We have a lot of issues ahead of us that we need to tackle. We’ve been looking for help both from our businesses here and our federal partners, and we will continue to do that.”
He added, “Like what the governor said, the Public School System, those [obligations] mandated by law like the retirement [fund] and all that — we are going to make sure that those are taken care of…. There are a lot of obligations and [a] lot of challenges but we will work.”
Not an excuse
One of the Democrats who didn’t support the Independent ticket of Palacios-Apatang in the gubernatorial runoff, former Rep. Daniel Quitugua said considering everything that is happening in the CNMI, and the fact that the economy is beyond the control of anyone else since everything that happens here is influenced by external events, the governor “highly deserves the support of the community.”
But the challenges that the CNMI is facing “do not excuse him from doing his very best to come up with the best ideas and programs that can mitigate the situation especially when it comes to the economy,” Quitugua added.
A Palacios-Apatang supporter in the 2022 election, community advocate Fabian Indalecio said he feels that the new administration “thus far, is not…rebuilding the trust of the people when they are not digging deeper into how to go about an alternative plan [instead of] terminating 500 ARPA-funded employees and implementing austerity by cutting [executive branch] government employee hours to 72.”
Indalecio said these types of decisions are causing the people to lose trust in the new administration.
“I also notice that the governor…and…the Legislature are failing to collaborate and it seems that they are not seeing eye to eye regarding the direction the CNMI needs to take to resolve its economic and financial crisis,” he added.
Indalecio said the administration and the Legislature “are going in opposite directions [and] I feel [that] both are not transparent [to] each other in addressing major issues….”
He said while the governor focuses on reviving the Japanese tourism market and supporting U.S. military presence, the Legislature is “trying to bring back the casino that people are resentful about and not supporting.”
“These first 100 days have made people more angry than hopeful — sad,” Indalecio said.
Gov. Arnold I. Palacios and Lt. Gov. David M. Apatang conduct a press conference Monday at the administration building on Capital Hill.
