Reduced allotments for the rest of the fiscal year

The Torres administration will be reducing the allotments of all agencies, branches, departments, offices, and other instrumentalities of the CNMI government due to a projected shortfall in revenues this fiscal year.

The projected shortfall in revenues this year is estimated at 4.7 percent.

In a letter to Gov. Ralph DLG Torres, acting Finance Secretary David DLG Atalig advised him of a projected reduction in the estimated general fund resources for the current fiscal year ending Sept. 30, 2019, blamed mostly on Super Typhoon Yutu for gravely affecting the CNMI’s revenue sources.

“The [DoF] reported a projected shortfall in revenue by 4.7 percent,” said Torres in a separate letter to House Speaker Blas Jonathan T. Attao (R-Saipan) and Senate President Victor B. Hocog (R-Rota). “It is evident that the recent presidentially declared disaster caused by Super Typhoon Yutu was a major contributing factor in the decline in projected revenue.

“It brought our tourism industry to a standstill for more than two months within the first quarter, causing a severe disruption in revenues, and affected many of our local businesses and residents accordingly.”

Finance originally estimated incoming resources at $258,139,107 for fiscal year 2019. Under new projections, this would go down to $246,091,107 after the total adjustment of $12,048,000 is deducted.

The adjustments include business gross revenue ($3,649,000); Northern Marianas Territorial Income Tax ($1,841,000); licenses, fees, and service charge ($1,500,000); excise taxes ($2,552,000); and other revenues ($1,000,000).

Torres said the projected reduction in the CNMI’s revenue resources require an adjustment in the budget authority for the current fiscal year’s balance. “The budgetary gross under Public Law 20-67 must be adjusted downward by $12,048,000, which must be absorbed by the budget authority remaining for the fiscal year.”

“Therefore…I will immediately commence a proportionate reduction in the allotment authority of all branches, their offices, departments, agencies, and relevant instrumentalities, which are subject to appropriation.”

He and Lt. Gov. Arnold I. Palacios are hoping that things would improve in the coming months but, as a precautionary measure, will “be taking a proactive approach” on the current financial situation of the CNMI.

“While Lt. Gov. Palacios and I remain optimistic that fiscal conditions will improve in the following months, it will be prudent and financially responsible to implement cost-containment measures to non-federally funded programs and agencies until revenue collections meet targeted goals,” said Torres.

“We recommend the branches take proactive steps in responding to the current fiscal conditions. We understand that this reduction will have an impact on public operations and services, but we must remain proactive in our approach by realigning government spending with available resources.”

Torres said that they had already taken steps to cut costs but all branches of government must work to examine their daily operations and activities, and identify the areas that can be cut.

He attributed the CNMI’s fast recovery from Super Typhoon Yutu to the use of local resources to pay for the upfront costs of the storms’ impact. “Our proactive approach in responding at a time of great need has led to a more rapid recovery. This has saved lived and provided much needed relief to our residents.”

Torres asked for everyone’s cooperation to weather the current financial situation.

Rep. Ivan A. Blanco (R-Saipan), chairman of the House Committee on Ways and Means, said they are ready to work with the administration in coming up with a balanced and working budget for the government for fiscal year 2020.

“I applaud the Executive Branch for taking the initiative to identify non-critical areas for reductions in order to meet this shortfall. We look forward to working with the Executive Branch to identify areas of cost-containment and revenue opportunities. Speaker Attao has tasked the [committee] to work with the [administration] to identify areas of cost-containment and revenue opportunities.”