Kilili: $65M in unspent CIP, federal highway money

The CNMI has $54 million in projected unspent capital improvement project money by the end of September as well as some $11 million in unspent Federal Highway Administration funds that could have been circulating in the local economy and creating more badly needed jobs, Delegate Gregorio Kilili Sablan (Ind-MP) said.

CIP grant money provides funding to a lot of infrastructure needs in the CNMI, including critical needs such as in the areas of education, power, water, wastewater and solid waste programs and services.

“The economy is our biggest problem, yet we’re sitting on $54 million in unspent CIP money. We also have $11 million of Federal Highway money unspent. At a time when we need to improve our economy, we need to spend money we have,” Sablan told Saipan Tribune.

Sablan said moving and spending this $65 million would have more weight in generating new revenue to help save the CNMI economy, compared to selling public lands and pushing for casino gaming on Saipan which would generate a smaller amount of revenue and only years after it is legalized.

The delegate, however, is not opposed to Saipan casino gambling if it’s properly planned and envisioned.

He said each casino license holder should be required to bring in an additional 200,000 tourists-inclusive of the gamblers and their families and friends-every year as a condition of renewing their annual license the following year, along with ensuring they pay their taxes.

“It doesn’t matter whether one or five investors have all the five casino licenses, the number currently proposed. If the 200,000 tourists requirement is used as condition attached to issuing and renewing a license, that’s when the whole CNMI economy will benefit. If you have five licenses, that’s already 1 million tourists, compared to what we have now which is what, some 300,000,” said Sablan, who is publicly sharing for the first time his views about proposals to legalize casino gaming on Saipan.

The delegate said casino operators could bring in this number of tourists by marketing and packaging the tours as part of a family tourism experience in the CNMI. For example, a father who is a gambler and who might also be a golfer would bring in his wife and two children who would engage in other tourist activities such as sightseeing and shopping.

“If one company can (bring in) 1 million tourists a year, it doesn’t matter who gets the license as far as I’m concerned. What we need to do is create the Northern Marianas as a destination. Not as sometime that plans to compete with Macau, Singapore, or Las Vegas,” he added.

Dr. Jack Angello, who is leading a campaign to gather signatures to put the Saipan casino question in the Nov. 6 ballot, is proposing a $5 million initial casino license fee to be paid within 90 days after the license approval and $200,000 in annual license fee every year thereafter.

Sablan believes that the existing casino petition is “shortsighted.”

“We need to start thinking and doing things long-term. And what we need to do long-term for us is to develop the Northern Mariana Islands as a tourist destination, and just imagine if we triple our tourists using casinos as an impetus, we all benefit.(But) what did they do, they cut MVA’s budget,” he added.

Gov. Benigno R. Fitial reduced the Marianas Visitors Authority’s funding under the FY 2013 budget compared to 2012.

Sablan said the CNMI also continues to ignore the benefits of being included in the national food stamp program called the Supplemental Nutrition Assistance Program. Under SNAP, food stamp benefits will increase by $12 million to $24 million, and the multiplier effect in the local economy will be some $20 million a year.

He also hopes that Saipan Air’s launching in July will help boost tourism and the economy in general.

‘Blame it on Fitial’

Senate President Paul Manglona (Ind-Rota), for his part, said he only has Gov. Benigno R. Fitial to blame for allowing $54 million in CIP money to remain unspent.

“For years, I have been asking the governor to hire a full-time CIP manager with expertise in procurement management even though the salary would cost $200,000 a year. That $200,000 a year would go a long way in helping the CNMI get $13 million to $14 million in CIP money annually instead of only $8 million-plus,” Manglona said yesterday.

He said the more CIP money that the CNMI is unable to spend, the more it gets punished by having smaller amount of future CIP money.

“People are asking, what’s wrong with the CNMI? People and the economy are suffering yet we do not spend millions of dollars in CIP to circulate within the economy, create jobs, and create multiplier effects,” Manglona added.

Manglona said he is also still disappointed that the governor vetoed twice a bill that would pay workers involved in certain federal-funded projects the U.S. minimum wage.

“There’s no one to blame for the unspent CIP money but the governor. He could have hired a full-time CIP program manager long time ago but he has not done so,” he added.

The Fitial administration has yet to respond to questions about the unspent CIP and Federal Highway Administration funds.

But the CIP Office, one of the three agencies tasked to administer CIP funds, told the Senate in 2011 that $34 million of some $37.5 million in grant awards will be spent in FYs 2011 and 2012 to include the Puerto Rico Dump closure and construction of the Rota and Tinian landfills.

The CNMI’s slow spending of CIP money has been believed to be a major factor in the CNMI’s receipt of a steadily declining amount of CIP funding for years.

In fiscal year 2005, the CNMI’s CIP funding was $12.5 million.

Five years later or in FY 2010, it was $11 million, before going down to $10 million in FY 2011, $9.5 million in FY 2012, and then to $8.7 million in FY 2013.

Sablan earlier said the Section 702 CIP grant represents only about 5 percent of all federal grant funds that the CNMI has been receiving. He said in FY 2010 alone, the CNMI received a total of $190 million.

“Nevertheless, we can ill afford this 30 percent drop in Covenant Funds between 2005 and 2013 so long as the need for 24-hour potable water, affordable power, solid waste facilities on Rota and Tinian, and adequate schools remain,” Sablan had told Fitial, as he warned the governor about the risk faced by the CNMI in losing CIP money if it continues to have a CIP funding expenditure rate of below 50 percent.

The CNMI’s rate of CIP money expenditure is at 36 percent, a slight improvement from 32 percent the previous year but still below the 50 percent threshold, Sablan said.

‘Chaotic’

Sablan also said the CNMI is being run in a “chaotic” manner. This is because the government is run in several directions.

He is not saying that Fitial is the reason behind this “chaotic” leadership.

“What I’m saying is that we need to do everything we can to help improve the economy, and these are some of the things we need to do-spend the CIP money given to us, spend the Federal Highway money, put the CNMI in SNAP, and if we would have casinos on Saipan, do it properly,” Sablan said.

Sablan said any federal bailout to save the economy won’t be possible.

“It’s not going to happen,” he added.

The CNMI has a budget of only $102 million in FY 2012, less than half of what it used to have years back.