DUE to lack of revenue from Saipan’s casino, which has shut down since March 2020 amid the Covid-19 pandemic, the CNMI government is tapping the $13.6 million community disaster loan from Federal Emergency Management Agency to pay the 25% of the retirees pension this year, Finance Secretary David DLG Atalig said.
Moreover, in order for the CNMI government to continue meeting its obligation to the Settlement Fund to pay 75% of the retirees’ pension, “we need to find additional resources or reduce our government’s expenditures,” he added.
In an interview, the Finance secretary said the American Rescue Plan Act funds cannot be used for pension obligations “so we need to [use] other funds” because Imperial Pacific International’s casino remains closed and is not paying business gross revenue tax.
Although the government is not obligated by the federal court to pay 25% of the retirees’ pension, Atalig said this commitment “translates to about $13.6 million per year.”
He reiterated that the administration “will need to use funds” from the Community Disaster Loan the CNMI government received last week from FEMA “to make our retirees’ [pension] whole.”
Atalig said the Torres-Palacios administration remains 100% committed to the retirees and will ensure they get their full pension.
“Should the casino BGRT continue to be …zero, we will need to find additional resources or reduce our government’s expenditures to ensure the retirees are taken care of,” Atalig said.
The CNMI government’s primary funding source to pay its obligation to the Settlement Fund and the 25% of the retirees’ pension were the BGRT and the license fee that IPI used to pay.
The Commonwealth Casino Commission recently suspended IPI’s casino license for failure to comply with five enforcement actions, which included the order to pay the $15 million annual license fee. IPI is also facing a number of lawsuits from vendors and former employees.
In a separate interview, Speaker Edmund Villagomez said, “We do need revenue to meet our obligations” but that revenue, he added, should be the revenue “that comes from whatever economic activity we have.”
He said the revenue derived from the local economy pays for government services.
“With all these infusions of funds from the federal government, like the stimulus, the pandemic unemployment assistance and the ARPA funds, we should look at the figures and see how federal assistance can help improve the CNMI economy.”
The speaker added, “It is a good time — and the administration is will probably also look into this — to review everything from top to bottom, in terms of government operations, and cut unnecessary spending. Let’s cut costs to help us meet our obligations to the Settlement Fund and the retirees.”
