AT least 12 of Saipan’s 19 lawmakers favor increasing the user fee paid by the garment industry.
Results of a three-day survey conducted by Variety showed that 12 Saipan lawmakers support the passage of House Local Bill 13-25, which seeks to raise by 1.3 percent the 3.7 percent user fee.
Six lawmakers said they were undecided while only one opposed the bill’s passage.
House Speaker Heinz S. Hofschneider, R-Saipan, authored the measure. He said the additional fee would enable Saipan to prepare for the eventual loss of revenue and jobs following the imminent exit of the industry.
If the bill becomes law, the speaker said Saipan would have the much needed revenue to explore other meaningful economic activities, including capital improvement projects and other infrastructure development that could help raise the standard and quality of living on Saipan.
According to government data, the yearly average user fee based on the 3.7 percent rate paid by the garment industry from 1998 to 2001 was $37.825 million.
The last time the fee was raised was in 1998.
Aside from Hofschneider, H.L.B. 13-25 already has the support of five lawmakers who co-sponsored the measure. These are House Floor Leader Jesus T. Attao, R-Saipan; Reps. Joseph Deleon P. Guerrero, R-Saipan; Arnold I. Palacios, R-Saipan; Andrew S. Salas, R-Saipan; and Ramon A. Tebuteb, R-Saipan.
Seven lawmakers who did not co-sponsor the bill welcome the increase of the user fee. These are Sens. Thomas P. Villagomez, R-Saipan; Ramon S. Guerrero, American Reform-Saipan; Reps. Stanley T. Torres, R-Saipan; Gloria DLC. Cabrera, R-Saipan; Benjamin B. Seman, R-Saipan; and Herman T. Palacios, R-Saipan.
Reps. Pedro P. Castro, R-Saipan, and Frank DLG. Aldan, R-Saipan, said they were still undecided.
The two, however, are co-sponsors of the bill.
When showed a copy of the bill which they signed, the two declined to explain why they were “undecided” on a measure they had co-sponsored.
Aldan’s brother-in-law is president of the Saipan Garment Manufacturers Association.
Guerrero said the garment industry must raise its user fee as its operations are directly linked to the Compact Impact issue.
“A lot of people are talking about Compact Impact,” the senator said. “And I think it’s also an issue related with the garment industry. The industry is also hurting us because they are also using our infrastructure—hospital, sewer, water,” he said.
“Most of the garment workers prefer to go to the Commonwealth Health Center because it’s cheaper. So who’s going to shoulder CHC’s additional expenses? I am definitely sure that the garment industry can and must support the increase in the user fee. If they don’t want to raise the minimum wage, why should they object to the 1.3 percent additional fee? They have to help out if they are saying that they are supporting the government,” he added.
Deleon Guerrero said he fully supports the bill, citing the adverse impact to the island of the industry’s operations.
“We are not saying that the garment industry did not contribute to the economy. They say that the industry did support the economy. But there were adverse impacts too that were not considered in the equation. They need to contribute to this impact fee. For the industry’s sake, the government has to increase the fee because infrastructure and support services also had to be expanded. There were also hidden costs in environmental degradation and the negative social and political impact of their operations. Calculate all these factors and I don’t think that we are getting what we think we are getting from them. We could have spent more than what we earned,” he said.
Torres, Villagomez, Attao, Herman and Arnold Palacios believe that the garment industry can pay the additional fee.
For Torres, the industry needs to share the cost of rebuilding Saipan—in cleaning up and beautifying the island “because they are the major cause of its deterioration.”
According to Villagomez, “that is what the industry should be doing—they have to pay an additional fee.”
Herman T. Palacios said “we need more revenue” thus “they need to pay more because they can pay more.”
Attao and Arnold I. Palacios said they support the bill which they also co-sponsored.
Tebuteb, one of the bill’s co-sponsors, said that based on his “primary findings, my answer is leaning toward yes.” But he also said lawmakers still need to get the “real numbers on how much the industry is earning and what’s the environmental impact of its more than a decade operations on Saipan.”
Seman is supporting the bill provided that the government will also implement cost-cutting measures.
“We are looking for more revenue for the government and if we would have more from the 1.3 percent user fee, I want to see the government putting that money into good use,” he said.
For Cabrera: “Being a multi-million industry, it is very difficult to understand why it won’t be capable of paying a reasonable user fee.”
But she was quick to add that the issue needs to be “further thought out so it would not look as a retaliation to the industry, but more or less a practical reason.” She did not elaborate.
Salas supports the bill provided that “the 1.3 percent will be used to renovate and beautify Western Garapan and will not be used to arbitrarily increase the salaries of some officials and employees.”
The chairman of the Saipan legislative delegation, Senate Minority Leader Pete P. Reyes, was the only one among the 19 members who said he opposed the bill.
The Republican senator said he was not only opposing the user fee hike but any kind of increase in taxes that could gravely affect the business sector.
“Right now our businesses are suffering. This is not the right time to increase taxes. If the user fee would be increased, the garment industry has to increase the prices of their goods and that won’t make them competitive anymore. This would surely affect the commonwealth,” he said.
He added: “I don’t believe in the attitude of (getting more out) of the garment industry because they are dying anyway.”
Vice Speaker Manuel A. Tenorio, R-Saipan; Reps. Oscar M. Babauta, Covenant-Saipan; William S. Torres, R-Saipan; and Martin B. Ada, R-Saipan were all undecided.
Tenorio, the delegation’s Ways and Means Committee chairman, argued that the industry might agree to raise the minimum wage, “so there may no longer be a need to increase the user fee.”
If there’s a need to increase the revenue, he said “this should not necessarily come from the garment industry.”
But if they will push for the bill’s passage, Tenorio said it should undergo public hearing. “We have to determine their capability. You just can’t go into what you are not really sure of. It’s premature for me to say if I’m going to support the bill or not,” he said.
Babauta, the author of the so-called “garment addition” law that allowed the industry to hire more alien workers, said: “I am not yet ready to debate the issue and the merits of increasing the user fee.”
Ada and William S. Torres, whose brother works for the island’s largest garment manufacturer, said they were still undecided.
The Saipan Garment and Manufacturing Association is hoping that members of the delegation “weigh the facts first” before making any decision on the bill.
“If we are talking about a popularity contest, we do not expect to win mini-contests at the Legislature, as it seems this will never be a losing proposition,” SGMA President Richard A. Pierce said.
Though the Legislature will never feel “as though, they have to answer to us or anything,” Pierce said it should be prepared to answer to those that will suffer “as a result of their reckless endangerment of an industry that provides more than they are willing to accept.”
“I do not mean to be mean or arrogant or unkind to the members of the delegation that would vote to raise our user fee, but this (move) is what I refer to as terminally unique,” he said.
“Why do those members feel that they are so much different than anyone else that they can do what no one would do under the same circumstances somewhere else?” Pierce added.
