CNMI budget comes dropping slow •Reyes says budget may slip below $200M level

The chair of the powerful House Ways and Means Committee yesterday warned spending level for the next fiscal year may plunge below the $200 million mark, saying department and agencies must submit a “realistic” budget package to live within the actual government revenues.

Rep. Karl T. Reyes likewise expressed concern over reports that the garment industry anticipates sharp drop in production and income as a result of the $1 billion class action suit lodged against Saipan manufacturers and their US. buyers.

Reacting to the administration’s projection of its FY 2000 budget, the representative said it is unlikely that the government could still collect $206 million in revenues from the crisis-hit economy over the next few quarters.

“Garment manufacturers are saying that they are down by another 25 percent, so that will definitely fall below the $200 million level the entire CNMI budget,” Reyes said in an interview during a break from the economic summit held at the Hyatt yesterday.

The conference was tackling the current situation of the island economy and a representative of the local garment sector told participants they expect to lose 25 percent of their income following decline in orders from their buyers worried over the impact of the lawsuit.

According to Reyes, the next two quarters under FY 1999 will be crucial in determining how much is the decrease in actual revenue collections from the garment business so that it can be factored in the budget for next year.

The committee, which handles financial affairs of the government, is set to receive the new budget package by May and it has until the end of September to appropriate the money to all departments and agencies.

Gov. Pedro P. Tenorio the other day said his administration may cut back by two percent to $206 million the proposed budget for FY 2000 from the current spending package in light of the worsening economic crisis on the island.

But some skeptics say anticipated revenues to be collected in the next fiscal year are unrealistic considering the expected drop in user fees the garment industry will pitch in to the local coffers.

If the budget shrinks below $200 million, it will be the first time in five years for the CNMI to fall under that level. The FY 1999 appropriation was the first for the government to have a lower spending package than the previous year.

Reyes urged departments and agencies to hand in a “realistic” budget to the legislature, saying current figures are not likely to improve by next year.

“They have to adjust accordingly to the actual figures that they are currently receiving from the government,” he explained, adding officials should “come in with the level of employment necessary to run the department and any excess has to be eliminated.”

The Northern Marianas is reeling from its worst economic crisis in years spawned by the two-year recession in Asia, the prime source of income and investments for its tourism industry.