Reyes says it’s dead; Adriano says not really

With the CNMI government struggling to raise revenues, Senate minority leader Pete Reyes said the Babauta administration’s proposed $226-million budget for fiscal year 2005 is good as dead.

Reyes said the proposed budget is unrealistic and was based on an exaggerated revenue estimate.

Senate President Joaquin Adriano, however, holds the opposite view, vowing to support the proposed budget laid out by the administration.

Saying the passage of the bill is the Senate’s top priority, Adriano foresees enhanced revenue collection and an improved economy for the next fiscal year, with the anticipated influx of Chinese tourists on the islands.

“We should go on that revenue projection [of $226 million],” Adriano said. “We do have a realistic budget for fiscal year 2005.”

Reyes lambasted the administration’s performance in maintaining its fiscal affairs, saying it has failed to meet several financial obligations in a timely manner.

“That’s [$226 million] a dead budget. That’s unrealistic,” Reyes said. “All you have to do is look at what’s happening.”

“It’s easy to say that the collection is good. It’s another thing to prove it,” he added.

There were reports that the CNMI’s debt to public and private vendors has risen to over $100 million in the current fiscal year, including the over $75 million in outstanding employer’s contributions to the Northern Mariana Islands Retirement.

Reportedly, the debt includes some $5.3 million in remaining balance owed the Commonwealth Health Center, over $16 million in unpaid utility bills to the Commonwealth Utility Corp., and over $4 million for goods and services from private vendors.

According to the Department of Finance, the CNMI government collected only $107.3 million in the first seven months of fiscal year 2004, which is way below the $213 million projected by the department for the entire fiscal year.

Reyes said he has been receiving numerous complaints from the public who have yet to receive rebate and refund payments from tax year 2002.

Early last week, the U.S. Postal Service’s postmaster on Saipan, George Diaz, said no rebate check had been sent out in the mail for the previous three to four weeks. Calls made by the Saipan Tribune to the Department of Finance’s Revenue and Taxation have yet to be returned.

Based on the administration’s recent declaration to the media, the government has been hoping to complete the release of 2002 rebates this month. A total of $20 million in rebates were filed for 2002, with at least $14 million already paid out. The government has been eyeing the fiscal year’s third quarter tax collection as source of funds to pay the remaining balance.

Adriano, who was acting governor sometime last week, conceded that revenue collection has been below average. He, however, appealed for patience among taxpayers, assuring that the administration would exhaust means to satisfy its obligations.

“[The] economy is so slow. Everybody is impacted by the Iraq war,” Adriano said.

He expressed optimism, though, that the CNMI’s economy is headed toward a strong recovery, noting improvements in its premier industry—tourism. Adriano added that the expected influx of Chinese tourists would help boost the CNMI’s tourism and economy and solve the government’s financial problems once the Commonwealth receives Approved Destination Status from the People’s Republic of China.