Taisakan: Bill to fund PSS and NMC not best solution

A bill that recently passed the Legislature in March is not the best solution to provide additional funding for the cash-strapped Public School System and Northern Marianas College, according to Northern Islands Mayor Valentin I. Taisakan.

Valentin also asked a review of House Bill 15-51, saying that, although the Legislature is going in the right direction, using the rebate base of individual taxpayers as the funding source may not be the best solution to the funding woes of PSS and NMC.

The bill aims to provide funding to support PSS’ seven-year Capital Improvement Plan from 2005 to 2012 and NMC’s CIP Plan for 2006 up to 2013.

“This approach, without question, is the simplest, easiest and the fastest way to generate funds for the PSS’ seven-year plan and NMC’s infrastructure needs,” said Taisakan, “but it will also rob individuals with families their expected rebate income that could support their essential needs such as remitting money to their children who are attending schools abroad.”

Taisakan said there are other sources of revenues that could be tapped without depriving people of their rebate money.

Such sources, he said, include funds that could be obtained from the Micronesian Impact Fund, a tuition fee hike for NMC nonresident students, and imposing nonresident fees to nonresident workers with children attending public schools, including NMC.

Other alternative actions he suggested include continued 702 talks on the Covenant for financial assistance, aggressively lobbying the U.S. Congress for the $140 million direct appropriation request by CNMI Washington Rep. Pete A. Tenorio, and increasing the gambling tax in poker establishments and casinos.

Taisakan said these sources would satisfy the intent and purpose of the bill to appropriate more funds to PSS and NMC.

He asked the Senate to defer action on the bill to give them time to consider the revenue sources he mentioned.

The House of Representatives passed a measure in late March that would reduce tax rebates to raise funds for the infrastructure projects of PSS and the college. It was reported that House Bill 15-51 would guarantee an annual funding of $500,000 plus 10 percent of the revenue generated from the rebate reduction for the infrastructure needs of NMC. All of the remaining funds from the rebate reduction would be used for the construction and repair of classrooms for PSS.

Authored by Rep. Justo S. Quitugua, H.B. 15-51 offers a reduced rebate structure. Currently, taxpayers with a rebate base of $20,000 or less receive 90 percent of the base. If the bill is enacted, they will receive only 80 percent.

The second category consists of taxpayers with a rebate base between $20,000 and $100,000. They currently receive $18,000 plus 70 percent of the rebate base over $20,000.

The last category, which consists of taxpayers with a rebate base of over $100,000, currently gets $74,000 plus 50 percent of the rebate base over $100,000. If enacted, the House bill will cut the rebate amount to $82,000 plus 30 percent of the rebate base over $100,000.

In addition, the proposed legislation seeks to further reduce rebate amounts by 10 percent in the second year, and an additional 10 percent in the third year upon enactment.