FINANCE Secretary Tracy B. Norita on Friday said the third quarter budget deficit reported to the Legislature was $10.1 million, not $68 million as stated by the Legislature’s fiscal analyst.
In a media conference, Norita also said that ongoing tax collection efforts will help address the shortfall at the end of the year.
She said task force teams have “conducted nearly 90 onsite compliance visitations to date, in addition to issuing payment notices to taxpayers, making phone contact, and collecting payments.”
The task force has collected approximately $1.42 million in outstanding tax receivables since its formation in July, she added.
She said “significant tax payments are currently in the active collection process that we anticipate to be collected by the end of the year.”
Norita said the CNMI government “continues to address fiscal challenges while prioritizing Settlement Fund obligations, critical operations and employee payroll.”
But she said other “under-appropriated programs continue to accrue such as $8.8 million in employer share for the Group Health Insurance of retirees and active employees, and $10.7 million in 25% retiree pension payments as of June 30, 2023.”
She said these “significant expenditures remain a priority to protect the healthcare of our employees and livelihoods of our retirees; however, other sources of funding must be appropriated to continue this commitment.”
At the same time the administration remains “cautiously optimistic with tourism activities in the fourth quarter and increasing construction projects that will help stimulate revenue generation,” Norita said.
She noted that the Marianas Visitors Authority has “announced…an increase in flights from Jeju Airlines to 3x daily from Seoul and 4x weekly from Busan during the fourth quarter.”
“In addition to its daily flight, T’Way Air has also launched an additional flight 2x weekly,” she said.
“This results in forecasted arrivals for Q4 increasing by 30% (compared to Q3) using an average load factor of 80% since July-September is peak summer season,” Norita said.
“For the fourth quarter, MVA has forecasted a total economic impact of $126 million of gross tourist expenditures from the Korea market alone, with Business Gross Revenue Taxes,” she added.
She reiterated the administration’s support for the recently introduced construction tax bill.
Economic recovery
In a letter to Speaker Edmund Villagomez and Senate President Edith Deleon Guerrero dated Sept. 14, 2023, Norita said “there is hope for economic recovery.”
She said her office “has made significant progress with the Marianas Public Land Trust…to facilitate expedited funding of the many federally funded construction activities that have begun, including the Garapan Revitalization Project and other capital improvements awarded to the CNMI. This financing partnership will help construction contractors receive timely payments while the CNMI awaits reimbursements from grantor agencies. These timely payments will stimulate our economy through expenditures and tax collection.”
“Though we expect economic recovery in the coming year and corresponding increases in revenue collections,” she said, “I encourage the Legislature to continue to pursue opportunities to streamline costs and increase revenue to support government operations and the delivery of public services. I welcome the recent introduction of a legislative proposal to make modest increases to the construction tax, and I look forward to continued discussion and collaboration on this and other proposals in the near future.”
She added, “The people of the Commonwealth rely on us, as their community leaders, to make timely decisions necessary to both reduce the overall cost of government operations and generate revenue. I appreciate your continued assistance and cooperation in our collective efforts to weather these financial challenges and move the Commonwealth forward to a fiscally stable and prosperous future.”
Tracy Norita
