Govt reports $100M CIP spending in 3 years

Capital Improvement Project spending has topped $100 million over the last three fiscal years, Gov. Juan N. Babauta announced yesterday, adding that CIP spending in each of the last three years was greater than in any previous fiscal year in Commonwealth history.

“There were millions of dollars of CIP grants and bond funds lying around unused when we came into office,” said Babauta. “Part of our strategy for economic recovery was to start spending that money.”

The CNMI spent $36 million in FY02, the administration’s first year, then followed up with $31 million in FY03 and $33.5 million in FY04. Average spending in the previous four years was only $20 million.

CIP spending boosts the economy by pumping dollars into construction businesses and the companies that supply resources to construction businesses. In addition, workers in all those businesses have more wages to spend in the CNMI economy. All of that spending has a multiplier effect.

Babauta said strategic CIP spending also enhanced the Northern Marianas as a tourist destination.

“When you invest in the revitalization of the Garapan tourist district, as we have, or replace an environmental disaster like the Puerto Rico dump with a environmentally sound landfill, as we did, then you make our islands more attractive to visitors,” he said. “Those improvements are having a positive impact on visitor arrivals.”

Visitor arrivals for 2004 are on track to top 500,000 and should make 2004 the best year for arrivals since 1997.

Babauta points to another important aspect of his strategy to accelerate CIP spending. “Putting $100 million into strategic infrastructure sends a loud and clear message to private investors that we in the CNMI have confidence in our future. We are willing to invest in ourselves.

“That spending, also, creates an economic platform on which entrepreneurs can make money.

“Look up and down Beach Road and Middle Road or at the new Paseo de Marianas. You can clearly see all the private capital improvements being made. By investing in ourselves with $100 million in CIP spending the government has encouraged that new investment,” according to Babauta.

Vickie Villagomez, the governor’s CIP grants administrator, added to the Governor’s explanation of how CIP spending benefits the economy, saying that making the islands beautiful for investors and tourists means the place will be better for all who live here.

“Then, too, there’s the benefit to the government. As a rule of thumb every dollar in CIP spending means 10 cents in additional revenues for the government,” she said.