THE government will incur a $24 million deficit for fiscal year 2002 unless “drastic measures” are set in place, Gov. Juan N. Babauta said on Tuesday.
He appealed to all department and agency heads to “pull our efforts together as managers” and prevent deficit spending.
The projected increase in revenue collection is not an assurance of stability, he said.
“If we have to borrow money, then we will do that,” Babauta said. “I would rather go on deficit spending than see the people (deprived) of their basic services,” he added.
“I have a responsibility to provide essential services the public deserves,” Babauta said.
The governor said the projected $24 million deficit is on top of the $69.5 million accumulated deficit the administration inherited from its predecessor.
“We have to work together and prevent the deficit to further increase,” Babauta told his Cabinet members.
Acting Finance Secretary Frank B. Villanueva said a revised revenue projection for FY 2002 will be released by the end of this month. The figure is expected to reflect “positive growth” in collection and revenue figures for the second quarter of the current fiscal year.
The Office of Management and Budget said the “adjustment” on the revenue projection for FY 2002 should make up for the possible deficit spending.
Meanwhile, the administration is “working very hard to reduce spending and stimulate the economy,” said the governor’s special advisor for policy, Robert Schwalbach.
There will be no reduction of manpower and working hours, he added. “The governor does not want to cut personnel and working hours,” Schwalbach said.
The CNMI government’s revenue collection has been declining since 1998.
