Finance Secretary Eloy Inos reported to the Legislature that the government ended FY 2008 with an $18 million deficit due to low revenue collections and overspending.
However, the CNMI later received from the U.S. Treasury $17.2 million in federal income taxes that should have been remitted to the local government since 1976 but were transferred to the federal government.
The CNMI received $6 million and over $22 million in two other separate payments for its cover-over taxes claim.
Finance told the Legislature that the government spent $173.7 million in FY 2008, not counting its arrears to the Retirement Fund.
Its collections for the period reached only $155.6 million.
This FY 2009, Finance projects its collections to further slide to $148 million after its prorated obligations are deducted.
Gov. Benigno R. Fitial has said that the CNMI government must re-implement austerity holidays and introduce unpaid holidays to reduce personnel expenses.
“Revenue collections and other financing sources recorded for the year, exclusive of those reserved for debt service, totaled $173.516 million which was $13.416 million more than projected,” he told lawmakers.
“However, this amount included an unanticipated $17.204 million one time payment of cover over taxes not included in the original estimate,” he added.
