Hospital officials are grappling with the reality of procuring medicine and supplies, vital diagnostic tests, maintaining equipment as well as hiring competent and qualified doctors, nurses and other necessary technicians with $5 million, which is the total amount budgeted for CHC by the administration and the Legislature.
Most government employees will not squawk about the cuts because most of the jobs are basically gifts — something for nothing. It is, in any case, more important for your elected officials to fund mostly nonessential employees at the hospital for $5 million than it is to pay for more doctors, nurses, technicians, medicine, supplies, tests and equipment. It is easier to reward political supporters than it is to look at government services and make hard choices that will benefit the entire commonwealth.
This is the principal reason why a lawmaker can stand up at a public hearing and claim that “there is no fat” in government, and that the “only solution” is to raise taxes and impose new ones to finance a bloated and dysfunctional organization.
The House minority leader, who wants you to pay a higher income tax rate, also mentioned a tax on real estate, specifically on businesses.
Somehow, these lawmakers’ interpretation of the Constitution exempts residential property from taxation. But taxes on businesses will further cripple not only the private sector but consumers, too. Businesses will be hard pressed not to pass this increased cost to their customers, and that means higher prices for consumables like milk, diapers, medicine, gasoline and other essential commodities. Even if lawmakers were to exempt these items from taxation, businesses will be forced to find a way to recoup additional costs, legally. Job cuts will result in the face of ever rising costs. That is the way the economy works.
And because land titles are so confused in the CNMI, it will be interesting to see just how the Legislature proposes to impose this real property tax on businesses only. Would that tax be applied to the real property holders, the fee-simple title holders or to the lessees or sub-lessees, or renters? What about hotel properties and golf courses that occupy public lands — will they be exempt or will DPL pay the taxes on their behalf?
Property taxes, to be sure, make a lot of sense to a lot of sensible people. It is the mechanism many jurisdictions use to finance public improvements like roads, bridges, sidewalks, drainage, water and wastewater projects — but not government operations as CNMI lawmakers propose. Even if they were to undertake a proposition like this, they will underestimate, as they tend to do, just how complicated the world is. They haven’t considered that it would take years to develop a system that would stand up to legal scrutiny, never mind the equally difficult task of implementation. And how many leases will be immediately abandoned, with foreign lessees choosing to leave than pay a tax they can’t afford?
There it is again. The sound of crickets chirping on Capital Hill.
No relief in sight
AT a recent emergency meeting of the Retirement Fund board of trustees, the administrator reported that Public Law 17-51 resulted in several drastic and negative consequences, including the termination of contracts of investment advisors, money managers, actuary consultants, attorneys, and possibly auditors. As part of its last bit of work before the conclusion of its contract, Wilshire Associates recommended that the Fund place its investments in mutual funds, but cautioned that if the assets dip below $260 million — it now stands at $265.9 million — the Fund should adopt “Glidepath 2012,” which requires a more conservative approach in managing assets.
At this point the Fund looks to be flying on auto-pilot, and anyone with good sense and a parachute is bailing out.
