Tick-tock
AFTER noting that the CNMI government remains largely dependent on ARPA funds (which will be depleted soon) and has to, once again, spend more on the ongoing efforts to contain Covid-19 (which seems to be never ending), the Finance Department’s third quarter report ends on an optimistic note. Citing the Korean and proposed Japan travel bubble programs, Finance said “we can anticipate an increase in tourism arrivals, demand for goods and services and an increase in revenue being generated to help the CNMI meet our FY 2022 projections.”
If tourism numbers improve significantly in the fourth quarter of FY 2022 which ends on Sept. 30, 2022.
And if not?
In its third quarter report, Finance stated that wage and salary tax, NMI income tax and business gross revenue tax collections exceeded the government’s forecast. Well and good. But again, those numbers were swept in by the (temporary) deluge of federal dollars. One of the main indicators of economic activity (or lack thereof) is the excise tax collection which, Finance says, is “unfortunately” 18.1% less than the budget forecast.
Clearly, the economy has to improve soon so that the government’s revenue collection can also improve before the CNMI runs out of ARPA funds.
And if not?
Arithmetic be damned
POLITICIANS “since ever since” have been promising to fix many if not almost all of the government’s financial problems, but without acknowledging its “root” cause: government will always spend more than what it collects, because many voters demand more government spending, especially on the big-ticket items such as healthcare and medical referrals, emergency/disaster response, government employment/payroll.
In this election year, as in the past, there will be a lot of pronouncements and declarations about the need for “fiscal discipline” and “cost cutting,” among the other usual campaign-season banalities spouted by many politicians and lapped up by many voters.
Everyone’s against overspending and for spending more.
Incidentally, have you ever heard of an election that is not “critical,” “crucial” or “important”? Of course it is — to the political careers of the candidates, and the employment/livelihood prospects of some of their supporters.
Do it
WE believe that Senator Paul, the longest-serving NMI lawmaker, was not merely grandstanding when he declared on Tuesday that lawmakers should “set aside” $13 million for the retirees’ 25% benefit. Based on his proposal, the entire amount would come from the government’s projected local revenue in FY 2023. According to the Senate legal counsel, the administration and the Legislature would have to figure out “where to cut that $13 million from.”
That shouldn’t be a problem for Senator Paul and other “very concerned” lawmakers (who are also not seeking re-election this year). His political allies dominate the House of Representatives which can introduce appropriation (and revenue) bills. The administration should provide them with an updated status of government accounts so these lawmakers can identify which government departments, offices, programs or services will get less or zero funding. While at it, they should also list the names of the government employees who may have to endure pay cuts or lose their jobs. As Senator Paul said, his proposal is “our opportunity to show where our priority is….”
