“It is important to note that there is a significant difference to this round of austerity,” he added. “Unlike the previous implementation of austerity due to revenue challenges as a result of Super Typhoon Yutu, this round of austerity is a result of the severe impact that the coronavirus (Covid-19) outbreak has had on our primary economic driver, our tourism industry.”
Demapan said the “impact of Covid-19 has drastically affected visitor arrivals in the CNMI with more than 16,000 booking cancellations and counting. This has already started translating into cancellations of passenger flights and shipping of goods and commodities. Obviously, in addition to the severe impact on the Commonwealth’s revenues and fiscal position, the outbreak has resulted in decreased traffic at our ports of entry, both airport and seaport.”
He said the administration anticipates “a much severe tightening of government expenditures and as a result, a much more streamlined approach at granting any request for exemption from reduced work hours. The bottom line is, we must be vigilant and prepared to expect that the ongoing situation will get worse before it gets better.”
In an interview on Tuesday, Finance Secretary David DLG Atalig said even law enforcement personnel “is minimizing their overtime…for [those with] 24-hour shifts like DFEMS and the police.”
He said the Customs Division still operates for 24 hours, but it has reduced its personnel’s working hours.
“Law enforcement agencies have reviewed their scheduling of operations,” he added. “At the airport, with the reduction of flights, [Customs is] maximizing officers in the seaport, airport and postal office.”
Agencies funded by federal grants also sought an exemption from the austerity measures, Atalig said, “but it’s the policy of the administration that there will be no discrimination of government employees, whether they are being funded by federal or local.”
Last year, he said, only federal enforcement programs such as the Brown Tree Snake K-9s, which needed to be at the ports for inspection, were exempted.
Atalig said the new austerity measures will be implemented starting March 15.
As tourism arrivals continue to decline because of the global Covid-19 outbreak, Atalig said it is anticipated that revenue collection, especially from the hotel occupancy tax, will also further decline starting in March.
The central government, he added, is regularly reviewing its revenue collections to determine if there’s a need to further reduce spending or take other actions.
“In the meantime, my projection for the worst case scenario might be our best case scenario,” he added.
