Commerce eyes adjusting federal aid formula

The CNMI Department of Commerce and local food stamp program officials are eyeing efforts to work with federal agencies on adjusting the economic formula that serves as the basis for allotments of federal aid on Rota and Tinian in a bid to account for higher commodity prices on the islands, a move that could bring recipients there more government benefits.

Senate lawmakers in a session on Rota last week said high retail prices on Rota and Tinian have diminished the buying power that federal assistance like food stamps can provide for the islands’ inhabitants and urged government offices to work to resolve the issue.

In an interview Tuesday, newly confirmed Commerce Secretary Michael Ada said his department and other local officials are considering a plan to ask the agencies tasked with distributing federal aid and money in the CNMI how they can change data used to determine the allotment formula.

One key issue, he said, is the consumer price index Commerce sets for the CNMI, a report on the average price of various commodities that federal officials study when determining how much assistance an aid recipient should get under initiatives like the Nutrition Assistance Program, the Women, Infants and Children program and Medicaid.

The prices on the index, Ada said, stem from survey data gathered throughout the CNMI yet price discrepancies due to the cost of shipping commodities to Rota and Tinian and data collection issues can influence the CPI’s results in several ways.

“Because Saipan has more of the commodities, that can skew the CPI in favor of Saipan,” Ada said. “If we take more samples of prices on Saipan, we’ll find that the average price for a bag of rice, just as an example, might be closer to $30 rather than $40.”

Rota and Tinian’s higher prices—which exceed Saipan’s on everything from food to fuel to beer—can also alter the CPI’s outcome, he added.

“Rota commodities are much more expensive and we take that into account when we do the CPI,” said Ada. “But what happens a lot of the time is that, depending on the price, a commodity on Rota can also skew the numbers because it is really high in comparison to Saipan’s prices.”

The price disparity between Saipan and elsewhere in the CNMI, Ada noted, can have a serious impact on those who rely on federal aid.

“The recipient on Saipan can often buy more with their food stamps if [the allotment] is based on the price of commodities here,” he said.

The local government’s plan to address this issue with federal officials comes as Commerce is now in the process of “rebasing” the CPI, re-examining the data to ensure it reflects current market conditions.

To resolve the problems linked to the wide price discrepancies seen throughout the CNMI, Ada said Commerce needs federal officials to give them criteria on how they can adjust the consumer price index data that programs like WIC and NAP use. This could require a simple market survey, he said, comparing prices on the islands.

A more expensive alternative would be to create separate CPIs for Rota and Tinian, he said. However, this could prove challenging to Commerce, according to a staffer in the department’s central statistic division.

“With the prices for just about everything on Rota and Tinian there are wide discrepancies,” he said. “Given the size of the islands and their population, to put together a whole other [CPI] is going to be difficult.’

The staffer also noted that certain commodities listed on the CPI are not found for sale on Rota and Tinian.