US House committee decides on $11-M funding for CNMI

The U.S. House Appropriations Committee was scheduled to vote Thursday morning in Washington D.C. (late last night in local time) on the Department of the Interior’s budget for FY 2001 which included allocation to the CNMI amounting to $11 million.

Commonwealth officials expressed hope to keep the federal assistance for the next fiscal year that represents construction grants provided under the Section 702 of the Covenant/ Capital Improvement Projects agreement.

The House Appropriations scheduled the full committee mark-up at 9:30 a.m. Thursday (D.C. time), which was 12:30 a.m. Friday on Saipan.

Political observers say the increase in funding for insular areas, that include CNMI, Guam, American Samoa, Puerto Rico and the Virgin Islands, will be a possibility as a result of budget surplus this year.

President Clinton’s budget request for the Northern Marianas reinstated the original $11 million appropriation that the island government has been receiving since 1996.

For his FY 2000 proposal, the financial assistance was cut to $5.58 million after the Interior department pushed for shifting of $5.42 million to the Virgin Islands to finance improvement of its prison facilities.

The move was partly triggered by failure of the CNMI government to match dollar-for-dollar the federal grants as part of the requirement of the Guerra/Manglona agreement.

Under that deal, the Commonwealth has to first cough out $11 million each year between 1996 to 2002 to avail of the money. Because of the economic crisis that hit the islands in 1997, the Tenorio administration has been unable to meet the stringent requirement.

Although the CNMI received $5.58 million last year, Congress reinstated the $5.42 million after its supporters in Capitol Hill expressed outrage at the plan to divert the funds to the Virgin Islands by extending appropriation of the funds to 2003.

For the next two fiscal years, the CNMI will receive allotment of $11 million annually and during FY 2003, $5.42 million will be set aside to make up for the loss last year.

The move to cut its aid to the Commonwealth came in the wake of efforts by the island government to seek matching funds for the annual assistance.

So far, the Legislature has appropriated about $58 million. mostly from local resources and loans, to match the $77 million provided by Washington under the seven-year CIP package.

It recently approved a plan to float $60 million worth of bonds to partly meet the matching requirement, while using the rest of the funds for other infrastructure projects here.

The island government is banking on the Covenant funds to spur the local economy, with $154 million in additional money that will be spent for massive construction projects on Rota, Saipan and Tinian.