Undeniable math
INSTEAD of pursuing fiscally problematic “revenue-generating” proposals amid a declining economy, at least two House members — TJ Manglona and Marissa Flores — have proposed tax exemptions for small businesses. In introducing her bill, H.B. 24-98, Rep. Flores said hard-pressed businesses “should not be required to pay additional taxes to a bloated government that cannot even reduce its own workforce but continues to take from businesses.”
Exactly. It does not make economic sense to demand more from those already under financial strain.
There are, in any case, two ways the government can provide immediate relief to the business community and other taxpayers: (1) not imposing new or higher fees or taxes; and (2) not creating new financial obligations.
To be sure, politicians don’t win elections by not spending (other people’s) money. But in the CNMI’s case, the government’s obligations are already legion, and public demand for more is seemingly insatiable — regardless of the state of the economy.
And that is the CNMI’s main problem — the root of the current malaise, discontent, and uncertainty. It seems that many have forgotten how basic arithmetic works — or that it applies to the government.
Meanwhile
THE CNMI government is teetering on insolvency because the tourism-based economy is still struggling to recover six years after the pandemic restrictions put it in a coma. We need more tourists to revive the economy so it can generate enough revenue for the government to meet its pressing obligations to the public.
This means CNMI leadership should continue speaking with one voice and educating federal policymakers about the need to remove, as the delegate said, federal barriers that deter tourists from visiting these islands.
The CNMI has the economic, geographic, demographic, and historical facts to bolster its case. For example, “China hawks” in the U.S. Congress may not fully understand what the EVS-TAP program is, how it was designed to address national security and related concerns, or that it was endorsed by the first Trump administration. Nor do they appear to have the latest data on “birth tourism” or the relatively small number of Chinese tourists visiting these islands. CNMI leadership and the business community should continue educating federal officials on these facts.
At the same time, local leadership should continue pursuing new investments and industries — an effort, incidentally, that predates the Commonwealth government’s establishment in 1978.
Here’s a radical idea: pay CUC!
A RECENT meeting between CPUC and CUC officials reminds us of the eternal question: Which came first, the chicken or the egg?
In CUC’s power outage issue, what is to blame: lack of maintenance or lack of funding?
CPUC says CUC should do a better job maintaining its power plants. CUC, for its part, says it has been underfunded for years and is not intentionally negligent.
Flashback to July 2022. The House utilities committee held an emergency meeting with CUC officials regarding the “ever-rising” (and very unpopular) Fuel Adjustment Charge, among other issues. Lawmakers were told that CUC’s power plants and engines “are very obsolete” and “require a lot of maintenance… The power plants have exceeded their useful life. These engines should have died a long time ago. But it’s really from the efforts of the [maintenance] staff… that they’re still running well beyond their useful life.”
CUC also informed lawmakers that it “has been developing plans for years” to replace these engines, but that “our issue right now is funding. We have a number of outstanding accounts that have not been paid,” referring to the government.
That was almost four years ago. What was the government’s response to CUC’s cri de coeur?
The administration made CUC an offer it couldn’t refuse: sign an MOU offsetting most of the outstanding amounts owed by the central government. It also enacted a law “forgiving penalties, interest, and late fees owed by the hospital.”
What did CUC get in return? A photo op and a press release.
Zaldy Dandan is the recipient of the NMI Society of Professional Journalists’ Best in Editorial Writing Award and the NMI Humanities Award for Outstanding Contributions to Journalism. His four books are available on amazon.com/.
