Inos: $140M budget, tourist arrivals to breach half-million mark in 2015

In an impromptu speech that sounded like an update of his State of the Commonwealth Address, Gov. Eloy S. Inos told the Rotary Club of Saipan yesterday that the CNMI government’s operating budget for fiscal year 2015 could be revised to $140 million and tourist arrivals would breach the half-million mark also next year.

When the governor was called to the podium, he asked Rotary Club members what they wanted him to talk about before proceeding to present—without any prepared speech or at least an outline on hand—the CNMI economy’s direction and the challenges that need to be overcome.

Gov. Eloy S. Inos addresses members and guests of the Saipan Rotary Club at Hyatt Regency Saipan yesterday, touching mostly on similar positive points he laid out at his recent State of the Commonwealth Address. (Haidee V. Eugenio)

“Tourism is picking up, although gradually. It’s gaining momentum at a rate of 7 percent to 10 percent per year. We’re expecting 470,000 visitors by end of 2014. It’s expected to surpass the half-million mark next year and numbers will continue to grow,” he told the Rotarians and their guests at the Hyatt Regency Saipan.

Inos earlier said the CNMI may see its annual arrivals reach 700,000 once again in two to three years.

In addressing the Rotary Club yesterday, Inos said there are two limiting factors to tourism arrivals’ growth: lack of accommodations and lack of airline seats to bring tourists to the CNMI.

In two to three years, Saipan alone would see a substantial increase in available hotel rooms with E-Land’s renovation and reopening of the former The Palms under the global Sheraton brand; the construction of a new hotel in San Antonio; the construction of a new hotel in Marpi; and the expected development of a $2 billion integrated casino resort on Saipan with at least 2,000 rooms.

The governor said Jeju Airlines will start flying to Saipan in October, bringing thousands of additional tourists.

He also told Rotarians that he met with United Airlines two weeks ago and expressed his concerns about the infrequent flights between Guam and the CNMI, as well as the high cost of air fare. He said “something needs to be done,” including bringing in low-cost carriers for interisland service.

The governor reiterated that as a result of the retirement settlement agreement, the CNMI has shrunk the general fund deficit from $300 million to $70 million.

He added that from an operating budget of $102 million in fiscal year 2012, the figure has gone up to $134 million.

The governor submitted to the Legislature a proposed fiscal year 2015 budget of $134.33 million, which is now lower than the 2014 budget of $135.786 million as a result of a recently approved supplemental budget of over $12 million.

But Inos said the 2015 budget could be revised later to some $140 million. The governor also touched on some similar issues he laid out during his June 30 SOCA.

During a question-and-answer, Rotarian David Igitol asked Inos whether the Saipan casino law would negatively impact a 1982 statute allowing the Rotary Club of Saipan as a non-profit group to conduct casino gaming for a short period of time to raise funds for its community projects. Rotary Club has been holding every year a Las Vegas Night, its signature fundraiser.

Inos, in response, said there’s no talk about repealing that 1982 law with the passage of the Saipan casino law. The governor recognized the importance of Rotary’s fundraising event and its contributions to the community.