It also posted a net deficiency of $120.3 million in terms of expenses for governmental activities, thus, raising to 51.9 percent its deficit between fiscal years 2007 and 2008.
Its $133.7 million in outstanding long-term debt in terms of bonds, however, stabilized and netted gains for the government after they were refinanced.
“Although the advance refunding resulted in recognition of an accounting loss of $8.2 million for the year ended Sept. 30, 2008, the CNMI in effect reduced its aggregate debt service payments by $7.8 million over the next 26 years and obtained an economic gain (difference between the present values of the old and new debt service payments) of $7.475 million,” a Department of Finance report stated.
Acting Department of Finance Secretary Robert Schrack said the CNMI’s expenses for governmental activities, including autonomous agencies, reached $322.3 million during Fiscal Year 2008, up by over $41 million than what it was appropriated to spend.
“The difference between total revenues of $281.2 million and total expenses of $322.3 million is what resulted in the $41.1 million increase in net deficiency,” DOF said in a report that accompanied the CNMI’s audited financial statement for FY 2008 made by Deloitte & Touche.
“As of September 30, 2008, the general fund reported an unreserved fund deficit of $256.3 million, which is an increase in the unreserved deficit of 17.5% from the prior year’s reported unreserved fund deficit of $218.2 million,” the report obtained by the Variety added.
DOF said the $322.3 million government expenses for the period were financed through taxpayers’ money at $170 million and the remaining $66.2 million from grants and other contributions.
The government’s extra expenses were mainly made to pay “unanticipated executive branch expenditures and government utility expenditures.”
Schrack said the CNMI revenues continue to be in the downtrend with the continued slump in the local tourism industry and the demise of the Saipan garment manufacturing industry this year.
“Economic factors continue to play a large role in developing the tax and other revenue budgets for the general fund of the CNMI. The local economy, still slowed by the effects of a drop in tourism and the decline of the garment industry, has continued to follow a trend of decreasing revenues. The prospect for Fiscal Year 2009 appear similar, with not much recovery in sight.
The Fitial administration proposed a $150.5 million budget for FY 2010 subject to certain austerity measures.
The Legislature already approved the amount but has yet to determine specific appropriations for all government agencies.
DOF said some significant revisions were made in the administration’s budget proposal to reflect the decline in projected revenues.
