GOVERNOR Arnold I. Palacios’ proposed fiscal year 2024 budget includes rate changes to the current schedule of the business gross revenue tax.
Palacios, who earlier stated that he didn’t want to raise taxes, is now proposing to increase the business gross revenue tax “by .5% for gross revenue earnings in excess of $50,000.01, an increase of 1 percent for gross revenue earnings in excess of $250,000.01 to $750,000, and an increase to six percent for gross revenue earnings in excess of $750,000.01.”
He added, “I urge the Members of the Legislature to act swiftly on this proposed amendment to the current BGR schedule as this budget anticipates to realize revenues beginning on the first day of the second quarter of Fiscal Year 2024.”
FY 2024 starts on Oct. 1, 2023.
Palacios said a “new revenue stream” is needed “to address persistent challenges to help sustain our government operations and services.”
Palacios said his budget submission would also reduce Tinian’s appropriation by $2.7 million. He said Tinian received $3 million via wire transfer from the CNMI Treasury in December 2022. According to the governor, the amount was identified as American Rescue Plan Act funds that the municipality has not spent as confirmed with Tinian Mayor Edwin P. Aldan during his meeting with the Office of Management and Budget officials and the Finance secretary.
As reported by Finance Secretary Tracy B. Norita, the government’s projected gross revenue for FY 2024 is $172.56 million.
Of this amount, $115.4 million is available for government appropriation.
The proposed FY 2024 budget measure reinstates a total of $12.5 million in earmarks for the solid waste management revolving fund, the Group Health and Life Insurance employer share and the hotel occupancy tax for the Marianas Visitors Authority.
The earmarks that will remain suspended are the CW fee fund for Northern Marianas College and the Public School System, the cigarette taxes for tobacco control and cancer funds, the PSS technical education fund, the alcohol container taxes for CNMI retirees and MVA, the 20% of hotel tax for retirees, and the e-gaming license fees for the retirees and municipal governments of Rota, Tinian and Saipan.
The government’s major expenses include the $34 million payment to the Settlement Fund, and $13 million for the retirees’ 25% benefit.
The governor’s budget proposal also includes the 25% for PSS; the 72-hour biweekly work schedule for executive branch employees; the allocation of $577,000 for the defined contribution plan; $7.2 million for Medicaid; and the partial allocation of $1.8 million for the central government’s utilities, except the judiciary and the Legislature.
“It is critical that any and all revenue-generating measures be considered and introduced expeditiously to meet the demands of providing uninterrupted public service to the people of the Commonwealth,” Palacios said.
“This effort will require close consultation with the administration as well as private sector, to ensure that we remain focused on resolving the issues facing the Commonwealth in the near future,” he added.
Palacios said his administration “will continue to monitor events and fiscal conditions that might affect the underlying assumptions and consideration of our proposed budget for FY 2024, and will inform the Legislature of any changes and proposed amendments as appropriate.”
