Gov’t saved $19 million in professional services

Gov. Pedro P. Tenorio’s administration has cut government expenditures by over $19 million in the last two years, which it credited to austerity measures implemented to boost savings and help ease financial difficulties confronting the Northern Marianas.

These savings were a result of the decision by the administration to bring down costs of the professional service contracts from a high of some $28 million during the last year of the previous government to about $8.65 million in 1999.

In an analysis of the professional service contract expenditures for FY 1997 to 1999, the Department of Finance revealed a downtrend in most departments and agencies, except for the Legislature and the Office of the Mayor on Rota.

The Office of the Governor alone yielded more than $9 million in savings, including $5.6 million after it opted not to renew contracts of lobbyists and media services that had helped the island government in blocking federal takeover proposals in U.S. Congress.

Legal services costs provided to the governor also dropped by nearly 90 percent to about $115,000 this year from $1 million in 1997, while policy consulting plunged to $177,000 from $2.7 million, or a 93 percent decline.

“The well planned government savings effort has been extremely effective in reducing unnecessary expenditures,” the finance department said in a news release.

“These savings have in turn allowed the government to pay (Earned Income Tax Credit) recipients, put aside sufficient money to pay tax rebates beginning in September and eliminate the need for forced reductions in personnel,” it added.

Put in place by Tenorio soon after assuming office in January 1998, the cost-cutting measures also produced sharp reduction in other government costs.

The number of leased cars used by government officials has shrank from over 400 during former Gov. Froilan C. Tenorio’s last year in office to 190 this year, while cell phones paid by taxpayers are now fewer by 70 percent, according to the DOF release.

“The CNMI government now spends less than 60 percent of its budget on personnel costs. This is the lowest ratio of all the (U.S.) Insular areas, and was accomplished without forced layoffs or reductions-in-force,” it pointed out.

Finance officials stressed the significance of these additional revenues to the local economy, which has been hurting from the continuous drop in tourist arrivals spawned by the two-year recession in Asia.

“As a result of these savings, there will be a very rapid and positive impact upon both the public and private sectors when the economy begins to rebound,” they said.

Administration officials have vowed to continue implementing the belt-tightening plan in the next years as provided under Tenorio’s 1998 transition report.

They hope that this, along with the over $60 million in capital improvement projects ready for construction, will assist in improving the island’s economy by 2000.

“Without the planned savings and cost reduction program, there would have been very serious disruptions in government services and forced reductions in personnel,” said the release.