AS the CNMI government approaches the one-year mark since the initiation of furloughs, Gov. Ralph DLG Torres has informed the 22nd Legislature that the administration will initiate reduction-in-force procedures involving 180 employees due to the economic downturn caused by the global Covid-19 pandemic.
According to the Northern Mariana Islands Administrative Code, personnel officers may use furloughs for more than 30 days if there is reasonable assurance that the employees furloughed will be returned to duty within the next 12 months.
However, if there is reasonable doubt regarding the return to duty of furloughed employees, then the appointing authorities must “separate the employees found to be in excess of management’s needs and proceed according to reduction-in-force procedures.”
The governor said the CNMI government needs about $5.7 million to avoid the RIF and bring back all furloughed government employees.
In a letter to Senate President Jude U. Hofschneider and Speaker Edmund Villagomez on Tuesday, Torres said, “Due to the unlikelihood that the economy will revive sufficiently within the next few months so that revenue will increase to the point that the government can recall all of the furloughed employees, the administration deems it necessary to initiate RIF procedures.”
He said at the time “our government implemented furloughs and terminations, our administration was hopeful that the Covid-19 threat would pass within a year and that tourism would resume and that the economy would revive after taking necessary steps to protect our community and ensure its safety and security through quarantine measures and vaccination rollouts.”
The governor said that while his administration, in partnership with the Commonwealth Healthcare Corp. and the Covid-19 Task Force, successfully kept the CNMI community safe, the local economy remains down because of its inactive tourism industry, resulting in a further decline in government revenue.
He said, “Our economy has not recovered to appropriate levels in order to sustain the current level of governmental operations,” he said.
This decision to implement RIF procedures was made after the administration consulted with the Civil Service Commission, the Office of Personnel Management, the Office of the Attorney General, and the Commonwealth’s executive department heads, the governor said.
He added that his administration has decided to initiate the RIF procedures as part of ongoing cost-containment measures to ensure the continuity of public services.
He reiterated that dire fiscal circumstances facing the CNMI have forced them to take this regrettable but necessary step.
“This decision is incredibly difficult for us to make and is one that Lt. Governor Palacios and I did all we can to avoid. While we have worked tirelessly and successfully to keep our islands safe, the fact is that a government can only operate with a functioning economy to support it,” he said.
“We have put forward a concerted effort to meet the urgent needs of those suffering from the financial and personal strain caused by this pandemic,” the governor said, referring to the applications for federal grants to provide rental assistance, mass care and food assistance, and new opportunities for job creation and employment.
However, the governor said this is not enough to bring the CNMI back to the level of funding before the pandemic.
After reducing the fiscal 2020 budget by 48% due to the shutdown of CNMI tourism markets, the government implemented furloughs of civil service employees and termination for excepted service employees.
About 516 government employees in total were laid off, with approximately 269 of that number consisting of furloughed civil service employees.
This was done in order to ensure basic services remained operational during the ongoing public health emergency, the governor said.
“Through the infusion of federal funding from the CARES Act and other federal grants pursued by my administration, we successfully placed laid off government employees, including about 89 civil service employees from the furlough list, into federally funded positions and other positions important to the Covid-19 response operation,” the governor added.
The goal, he said, was to maximize federal funding in order to accommodate as many furloughed employees as the CNMI government could.
“We are grateful that we were able to do so given the circumstances and limited resources. Unfortunately, even with reprogramming and maximization of all available financial resources, we have not been able to bring back 180 government employees from the furlough list,” the governor said.
He noted that the current FY 2021 budget appropriation does not provide sufficient funds to recall furloughed employees.
To fully fund the 180 currently furloughed employees so that they may be recalled, the government would need $5,688,239.44 for FY 2021, which the governor said is in addition to the 3% shortfall in anticipated revenue incurred during the first quarter of FY 2021.
“The significance of the CNMI’s tourism industry on the economic well-being of our community and the proper financing of the services our community expects from its government have been made very clear in this crisis,” the governor said.
He noted that in 2019, the CNMI received, on average, 30,000 tourists a month. The elimination of tourist arrivals during the crisis devastated businesses that directly or indirectly rely on the tourist industry, the governor said.
“While federal assistance aids in mitigating the further loss of consumer activity, it will not replace the role of tourism in supporting economic activity and government revenue,” he added.
With no economy and in anticipation that further reimbursements will pay the upfront costs of the CNMI’s Covid-19 operation, the Commonwealth government is working very hard to maintain essential services, the governor said.
He said the CNMI is the only territorial government in the U.S. that is making drastic cuts of this magnitude.
“No other state or territorial government is required to undertake these measures. We are an island economy subject to the external forces of our global economy, and this global pandemic has negatively impacted the overall world economy,” the governor said.
He said he will continue to take action to ensure that the CNMI government provides critical public services, rebuilds its economy through tourism promotion, and pursues federal relief to assist local residents.
“My administration continues to work with the Marianas Visitors Authority and South Korea travel partners to fully implement the travel bubble between the CNMI and South Korea, which allows for a partial resumption of tourism under strict Covid-19 mitigation guidance and generate much-needed local revenue,” he added.
But again, he said, this will not be enough to make up for the shortfall.
It is estimated that in order for the CNMI to generate the necessary resources from the tourism industry to support the furloughed employees, it would need more than 130,000 tourist arrivals in the remaining months of this fiscal year.
For this reason, the governor said the Legislature must consider passing legislation that promotes revenue generation and business development “in order to aid in our collective efforts to increase government revenue and hopefully bring back all of our employees.”
Meanwhile, the administration has directed all executive branch departments and activity heads that currently have furloughed civil service employees to immediately submit a Notice of Intention to Implement a Reduction-In-Force form to OPM in compliance with NMIAC § 10-20.2-263.
The governor said OPM should be receiving these notices shortly.
“My administration knows that the RIF process will be complicated, man-hour intensive, and a cause of regrettable anxiety for employees. By giving the RIF process the attention and resources it deserves, my administration hopes to minimize any disruption the process will have on the activities of the agency and the lives of the affected employees,” the governor added.
“My administration will continue to work hard to protect the public health and well-being of every person, and we will continue to pursue assistance for our unemployed and those most vulnerable.”
The governor said he and Lt. Governor Palacios are looking forward “to working together with the 22nd Legislature to meet these challenges.”
