THE CNMI government has not made any “adjustments” to its tax rates for the past 30 to 40 years, Gov. Arnold I. Palacios said on Friday when asked about tax hikes.
Noting the revenue shortfall of $3.4 million in the third quarter of the current fiscal year, Palacios said he is mandated by law to inform all branches of government about it.
“But I believe in the fourth quarter we will make it up,” he added. “According to Rev & Tax, August is usually a high revenue collection [month]. [Meantime] I have advised all branches of government, including the Legislature, [about a] proportionate budget reduction in the allotments. It’s just something that I had to do, $3 million, I think we will make it up,” the governor added.
He acknowledged that “nobody supports tax hikes…but in order to run the government services…at the level we believe they should be…we have not made any adjustments in our tax rates for 30 to 40 years, ever since. Even [government] fees — it’s tricky, it’s sensitive. Nobody wants to see [the rates] changed, [but] no matter what it is, we got to balance the services that need to be provided. Now…if revenues are not there, we have to cut those services. Right now, I believe…crucial services are really at a level we can’t…afford to cut anymore, so we got to have those adjustments, and to increase revenue we have to change the rates nominally. But then again, I can only propose that. It has to go through the legislative process, [and] if that’s not coming in, I have to make those other adjustments.”
Palacios did not elaborate.
Early last year, he said it was unlikely that taxes would be raised or new fees would be imposed to address the deficit. “I believe it is a misappropriation of public funds, and I don’t want to go out and raise taxes again and impose the penalty on the businesses and the people of the Commonwealth because of the misappropriation [and] misdeeds [of] government officials,” he said.
