Fitial-Villagomez projects difficult year ahead

Initial transition committee estimates peg the CNMI government’s deficit to be significantly in excess of $100 million. Some transition committee members even believe the government’s true deficit could be close to $200 million—an amount approaching the government’s entire annual operating budget, according to a statement by the incoming Fitial administration.

In view of this sobering financial reality, Gov.-elect Benigno R. Fitial and Lt. Gov.-elect Timothy P. Villagomez anticipate a trying start to their administration but they also stressed that the problems are not insurmountable.

“The new administration anticipates a difficult year ahead in view of the financial insolvency of our local government,” said Fitial.

The statement was issued yesterday after Fitial and Villagomez reviewed the preliminary assessment of the CNMI government’s financial position, which they jointly described as “fragile and precarious” after consulting with key members of the transition committee charged with evaluating the government’s financial affairs.

“Only a comprehensive financial audit will tell the whole story,” said Fitial.

According to Villagomez, “The financial condition of our government is far worse today than it was four yeas ago.”

Villagomez cited the withdrawal of Japan Airlines and the loss of major investors as contributing factors leading to fewer revenues for our local coffers.

Fitial, however, expressed confidence in eventually overcoming the financial difficulties besetting the Commonwealth. “As difficult as the year ahead may be,” said Fitial, “our financial problems are not hopeless and insurmountable.”

Villagomez echoed Fitial’s confidence, believing that the CNMI’s economy will rise again if the new government attracts new investments and spends prudently. “Sound fiscal management is critical,” said Villagomez.

Still, the governor-elect believe that the CNMI’s financial condition will probably get worse before it gets better. They caution the public not to expect immediate or overnight results, arguing that the new government “will need the patience, understanding, and cooperation of the people to solve our problems.”

“Having taken a glimpse of the true financial picture of our local government, the realistic picture is far from rosy,” said Fitial.

“This is why we are humbly appealing to our people for their understanding and patience as we begin the hard task of resolving the pressing financial issues facing the NMI,” Villagomez added. “We must come to grips with the financial facts of our government and realize that we can no longer afford many of the things that we use to take for granted during more prosperous times.”

The incoming administration readily concedes that certain sacrifices must be made in order to enable the government to pay for essential services and still gradually retire the deficit as mandated by the NMI Constitution.

Although Fitial and Villagomez have already begun the task of searching for fresh investments from Japan and nearby Asian countries, they understand that the establishment of new investments will take time, perhaps up to a year or two before the CNMI begins to realize additional jobs and revenues.

Despite the enormous financial challenges they face, Fitial and Villagomez are confident of reaching their stated goal of “better times” during their first term. “We expect the CNMI to be better off four years from now, but we urgently need the people’s patience and cooperation to pull the NMI out of its financial mess,” said Fitial.

Fitial and Villagomez will be inaugurated at 2pm on Jan. 9.