MPLT is already struggling to come up with the right word to describe its remittances to the central government.
“Loan” is how some describe it; “advance interest” is how MPLT chooses to call it, knowing that it will not be paid back.
“Bad practice” is how most would generally describe the money transfer that is prohibited by the Constitution and by the MPLT charter itself. “Borrowing” from one agency with funds to pay for other agencies that are chronically without funds is how the government landed in this financial mess in the first place.
The government, however, will continue to throw good money after bad, and if new revenues aren’t identified, new words will be invented to circumvent the restrictions placed on MPLT funds, again, in the not so distant future.
The Legislature, if it actually wants to do something, should examine all agencies and identify their nonessential employees and unnecessary expenses. All departments, including PSS, DPS and the hospital, have them. They should be cut. There is no other way to manage this financial crisis that has been many years in the making. The proposed austerity measures are band-aid solutions applied to government coffers that are hemorrhaging red ink.
Government agencies must also come clean on their outstanding obligations. It is outrageous for the Marianas Visitors Authority to suddenly announce in closed-door legislative meetings that it has a $2 million tab owed to travel agents. Did Governor Fitial approve these obligations? Did the Legislature appropriate this sum previously? How did this come to pass?
In a similar vein, no one can blame the governor for vetoing the Liberation Day Committee’s request for $45,000 at a time when salaries or fuel deliveries are in doubt. That this action comes as a surprise to committee members and the Saipan mayor only demonstrates how disconnected some are from the tough haul facing many families of the commonwealth.
The governor shows with actions like this that he understands the nature of the financial mess the CNMI is facing, but then refuses to take the next step. He must come up with a realistic budget. Instead, he submitted to the Legislature a $132 million appropriation measure for FY 2011 even though there is no evidence that this figure can be met.
Some are proposing tax hikes, like rolling back the rebates, which are taxpayer, not government, money. The government, in releasing rebate checks, is merely returning what it borrowed, interest-free, from taxpayers. The government’s wasteful and extravagant spending habits are the problem, not the current tax system.
Tax increases, in any case, will do one thing — reduce the rolls in the private sector, which is this bloated government’s main funding source.
Of course, if these increases were targeted at solving one problem like paying Retirement Fund contributions then it might be worthwhile. Unfortunately, whatever funds are raised will simply be used to maintain a failed system that is bound to collapse one day with catastrophic results. Individual struggles to pay mortgages will pale by comparison to the rage that will be unleashed when this government’s “Ponzi” scheme can no longer be sustained.
This is why the government must stop giving the people false hope about its ability to produce funds for all its employees and services. By now, the public is aware that trouble is brewing and is willing to accept compromises and sacrifices. If cuts are done in a reasonable and rational way they should gain acceptance. But payless threats every payday are crippling because they create so much uncertainty that shrinks the revenue base further — no one ends up spending for anything, which is fatal for an economy that is already gasping for air.
Targeted government job cuts and aggressive placement efforts in the private sector would be a good way to begin addressing the government’s current dilemma in a responsible way. This will take time and effort which is why it must be implemented now.
