In a letter dated March 3, Torres told the president that the loss of the CNMI’s two largest tourism markets — China and South Korea — due to the outbreak “should be considered as the unequivocal and complete collapse of the foundations of our private sector in the islands.”
With the collapse of the drivers of private industry, Torres added, CNMI government revenue and the services of government will soon struggle to remain operational.
He said due to “a tumultuous past several decades of development and federal regulation, our economy has evolved to the current position of fragility.”
But regardless of the causes of this lack of diversity, he added, “The clear fact is that the economy and the government’s ability to maintain public services are deeply in trouble. We are now anticipating a total government budget falling as low as $90 million. If the CNMI were to add its mandatory obligations to bond holders, the federally administered pension fund, and the Public School System, the CNMI government is potentially left with less than $20 million to run a government for a population of 53,000 people. To add perspective, the recently amended budget for Fiscal Year 2020 provided the executive branch alone $36 million.”
Torres said the “limited funding remaining from this contraction in the economy must pay for police officers and vehicles, the local matching share of the Medicaid and [Children’s Health Insurance Program], support the needs of our hospital, maintain our judiciary and Legislature, pay utilities of government facilities, and protect the well-being of our community and our environment. This is simply not enough.”
Torres said the Commonwealth is “working toward steps to address this dire situation. The CNMI is working toward consolidating departments, reviewing government workforce needs, shifting government policy, and sheltering as much as possible the critical services of government needed for the safety of our population.”
However, he added, “I cannot stress the existential concerns that have arisen as a result of the present outbreak to the CNMI. Due to tourism being our sole remaining industry, there is no community in the United States more effected by this global crisis than the CNMI.”
Torres said he is asking for the president’s “understanding of the present circumstances and your openness to continue discussing the manifold ramifications that will arise in the coming months as we work through these trying times. What would be most beneficial as this situation evolves, is the designation of a member of your staff that the CNMI can communicate consistently with in navigating the path ahead. I will do all I can to ensure the CNMI does not fail in our efforts to be productive members of the American community. However, in this circumstance, the data do not present cause for much optimism.”
Torres at the same time thanked President Trump for his “phenomenal commitment to the CNMI through participation in the Covenant Section 902 Consultations” in 2019.
Torres said the CNMI is also grateful “that due in large part to our collaboration with your administration, we have not experienced a single instance of the virus in our islands for now.”
In an informal meeting with CNMI lawmakers on Tuesday, the governor informed them about his letter to the president.
A CNMI official said the cash flow for the second quarter of fiscal year 2020 “is not looking good” as a result of further cancelations of flights from South Korea.
There might be a “second round” of across-the-board cuts in the coming months, the official added.
