10-pct. budget cut projected

The administration of Gov. Ralph DLG Torres is looking at about a 10-percent cut in budgetary proposals once all agencies and departments under the CNMI government submit their respective proposals for the next fiscal year.

The administration is now in the process of crafting the fiscal year 2020 budget and would soon submit its proposal to the Legislature, with the House of Representatives Ways and Means and the Senate Fiscal Affairs committees doing their part of calling for public hearings and meetings with several government agencies and departments.

Lt. Gov Arnold I. Palacios said they are calling on all government agencies to scrutinize their budget allocations for their fiscal year 2020 operations in order to help the administration, while keeping their mandate of responding to community needs—all in light of the CNMI still recovering from two devastating typhoons.

“We have talked to our department heads and other agencies in the government, and we encouraged them to do their own cost-containment. The governor is going to issue some very strong memos and communications to all departments regarding the cost-containment efforts that we’re going to implement across the board,” said Palacios.

“I can say that we’re going to have a reduced budget and we have to be realistic about that. I understand and the [the Office of Management and Budget]…has called for the fiscal year 2020 budget [to have] a conservative reduction of 10 percent in proposals. …We are going to start at that level.”

Rota was hit by Typhoon Mangkhut in September, while the islands of Saipan, especially the southern part, and Tinian got the brunt of Super Typhoon Yutu before the end of October.

The Francisco C. Ada/Saipan International Airport was soon closed down after the facility sustained major damage and no tourists came in.

Palacios said the two storms, Yutu in particular, gravely affected the CNMI’s revenues in the last quarter of 2018.

“We all know what [we went through] after that storm and devastation of that magnitude. For every family, especially on Tinian and the southern part of Saipan, it had a major impact, whether through their homes or through our infrastructure, and even to our economy. Our economy is the backbone of our budget.”

The idea is to start out by reducing the budget across the board in order to be fair to all government agencies and departments. “Then as the priorities come in, we will continue to take a look at it. That’s going to be the administrative process, with the executive branch and, of course, it is also going to be a legislative process.”

“But there are priorities. Of course, health, education, safety of our people, and the continued recovery efforts. All these programs are going to take precedent over all other programs.”

Despite the expected slump in revenues, Palacios said the administration is optimistic that it won’t be that substantial. “As we move over the process, we will continue to monitor the revenue base and the revenue level, and adjust [the budget] accordingly.”

“But, at the end of the day, I am comfortable to say that our economy is going to have to recover a lot more than that. At a lot more…than even where we at today. We even anticipate the same level of funding for our overall government budget for this fiscal year and the next.”

The CNMI budget in fiscal year 2019 was a record-high of $258,139,107—which was $11.2 million higher than the $247 million in fiscal year 1997, at the peak of the Commonwealth’s two major revenue sources—garment and tourism.

The fiscal year 2019 budget was also $21.4 million higher than the fiscal year 2018 budget of $236.77 million.