PSS owed over $12.4M

For the current fiscal year, the CNMI government was unable to meet the constitutional mandate that gives the Public School System at least 25% of the general fund revenue.

PSS was supposed to get a budget of over $42.8 million this fiscal year 2019. Saipan Tribune learned over the weekend that PSS is still owed over $12.4 million in allotments.

Responding to Saipan Tribune’s query if the CNMI government was able to meet the CNMI Constitution’s mandate that entitles PSS to at least 25% of general fund revenue, Finance Secretary David Atalig said it had failed to do so.

Had the CNMI government been able to give PSS the over $12.4 million it still owes PSS, that would have made the CNMI government compliant with the CNMI Constitution.

“Did we meet the 25% mandate, at this time, no. The remaining balances for PSS will meet the 25% mandate,” he told Saipan Tribune. “If I’m not able to do so by [the] end of fiscal year [2019], I still owe PSS the balance which will be carried over to the next year [fiscal year 2020].”

To address this shortfall somewhat, Atalig recommends distributing $10 million from the annual casino license renewal fee to pay outstanding balances owed to several agencies—PSS included. He recommends reallocating $3 million of the $10 million to PSS.

However, the local delegations appear to have first dibs on that money. Finance recently received $15,502,570 as payment for the annual license fee from Imperial Pacific International (CNMI) LLC, the exclusive casino license holder. As provided by Public Law 18-56 and as amended by P.L. 20-10, $15 million of that amount shall be allocated to the local delegations.

In a letter to Gov. Ralph DLG Torres dated Sept. 3, 2019, Atalig recommended that Torres use his powers, as authorized in the Emergency Disaster Declaration, to redirect $10 million of the license fee to the general fund.

In the same letter, Atalig explained to Torres that there could be a possible shortfall of $19 million by the end of fiscal year 2019, on Sept. 30, 2019, because of “natural disasters and labor conditions” affecting collections and business activity in the first half of the fiscal year. The natural disasters that came in the form of Typhoon Mangkhut for Rota and Super Typhoon Yutu for Saipan and Tinian disrupted the projections for fiscal year 2019. Soon after Yutu struck in late October 2018, Torres imposed government-wide austerity measures.

Current law mandates that the $15 million be split up among the Saipan and Northern Islands Legislative Delegation, the Tinian and Aguiguan Legislative Delegation, and the Rota Legislative Delegation.

In his recommendation to Torres, Atalig suggests reallocating $1 million each to the NMI Settlement Fund, Northern Marianas College, and the Marianas Visitors Authority. Another $4 million would go to pending vendor payments, while the remaining $3 million would go to PSS.

Atalig said $3 million would be set aside for the Saipan delegation and $1 million each for the Rota and Tinian delegations, respectively.