Administration spending dropped by $35-M

Living up to the expectations of its self-imposed cost-cutting measures since 1998, the Tenorio Administration managed to slash its spending for the last fiscal year by more than $35 million, according to a report from the finance department.

The DOF report, contained in the commerce department’s economic review, disclosed the Commonwealth spent only $220.3 million in Fiscal Year 1999, lower from the previous period’s $255.6 million.

Government officials said the quality of the delivery of basic social and public services did not suffer despite the drastic cut in expenditures since the austerity measure primarily focused on non-essential spending.

A big slice of the savings went to a program aimed at eliminating the cumulative budget deficit, which the administration of Gov. Pedro P. Tenorio inherited from the previous leadership.

Determined at intensifying the government’s cost cutting measures and revitalizing the island’s economy, Mr. Tenorio is raising hopes the government will be able to reduce the budget deficit by another $10 million this fiscal year.

The $80.6 million budget deficit was down to $70.7 million by end of Fiscal Year 1999. Government officials attribute the landmark reduction to drastic austerity measures instituted by the Tenorio Administration.

Last year was also the first time government revenues edged up since visitor arrivals began dipping in 1997, with collection in key duty areas like hotel occupancy, excise, and bar & jackpot taxes showing strong improvements.

Sans stringent cost-cutting steps which were established by the Tenorio Administration, the deficit could have ballooned $133.4 million in FY 1998.

The governor’s finance managers are looking at a three-pronged approach that would assist the government in reducing the cumulative budget deficit — elimination of wasteful spending, economic revitalization efforts, and passing economic development legislation.

Finance officials said funding problems faced by the Commonwealth, especially on government agencies responsible in the delivery of essential services, is associated with the existing budget inadequacy.

General funds reached an all-time high of $248 million but public spending also shot up to record $268.1 million under the administration of former Gov. Froilan C. Tenorio.

Aside from the institution of belt-tightening measures, the government is also seriously considering proposals to institute more revenue-generating measures that would replenish depleting public coffers.

The Economic Revitalization Task Force has been trying to come up with mechanisms that would pump up government revenues to enable the administration carry out various social and community programs.

Government earnings are expected to suffer a sharp decline in the next two years as officials see a gloomier picture of the local economy because of the financial upheavals in neighboring Asian countries.

Revenue estimates for fiscal year 1999 had been reduced by more than $32 million as a result of slow economic activities in the CNMI since late 1997, following the financial upheavals in Asia.