Revitalizing the CNMI economy in four ways

[B]By STEVE JANG[/B] [I]Special to the[/I] Saipan Tribune

There are at least four major ways in my view of the many possible or potential means the CNMI economy could be revitalized that is realistic or sound. But in order to make this achievable a lot of diligent efforts and tireless man-hours have to come into play between our governor and the legislators. In addition to this, the input of our other civic leaders such as the mayor, municipal council and leaders in our business sector and community must be acknowledged for their input, as they voice their issues and concerns affecting the economy of the CNMI. And with this in mind they may indeed come up with even better solutions.

The leaders must listen to the community and table such inputs for study should that be the answer or answers to do good for the economy. And this should be done with public hearings and a well-thought-out plan for follow through to ultimately accomplish such endeavor.

The egotistical approach and rhetoric as to who gets the credit for such idea(s) should not be the case, for a long hard battle will ensue, only to amend or put such idea in another different perspective. An example of this was when Article XII was placed as an initiative for 75 years extension. Another legislator said 80 years, then the governor said 90 years without even “battling off” the 75 years idea. I believe Rep. Hofschneider introduced the 75 years first as a resolution, but up to now nothing has happened because the other two “thought their idea is the greatest.” This is a shame on our leaders and is a prime example of needless bureaucratic interference that stops things from moving and nothing is done because most of our leaders are notorious for doing such things, with no productivity at their end.

Nevertheless the following are areas or ways I believe that the economy may be revitalized:

[B]1. Business tax structure of the CNMI has to be revisited.[/B]

The current business laws and tax structure in these areas have to be updated and provide the business sectors avenues to conduct business with lesser tax to pay in the meantime. These are taxes in areas of BGRT, room tax, and capital gains.

The “Dave Santos Law” in Guam is one that could be emulated to ease the burden on the business community. Tax breaks of some sort such as the qualifying certificate or rebates has to be provided in the meantime should the Dave Santos Law is not granted by our leaders. This would allow businesses a break before they all shut down, which will definitely result in lesser revenue for the government.

It has been proven by economists worldwide that it is small businesses that drive more of the economy—much more than is believed, as opposed to that of the big industry. Why is this? Just like in the CNMI, there are more small businesses added together that infuse more money to the government than a few hotels (only 10 big ones) put together. Small businesses are the wonders of the business world in terms of what they can do to actually put more revenue in government coffers, not to mention being the biggest employer and trainer in the economic market.
[B] 2. Abolish Article 12 of the CNMI Constitution.[/B]

It will stimulate growth and improve the economic base of the CNMI. It will open up revenues and employment in the construction and banking industry to include secondary markets that would be a multiplier effect because of these markets. These are areas in insurances for bonding and liability coverages and appraisals as well. Hence, the normal coverages will kick in for the long haul such as coverages for fire, typhoon, earthquake and liability as well.

Banks will provide loans for housing, housing renovation/improvements, for selling and purchasing of houses, buildings, and even for refinancing. These loans will be available for as long as they are affordable both for businesses and private individuals.

Loans will be enhanced with the acceptance for financing incorporated with the bank for Federal Home Loan Mortgage Corporation, Federal Housing Authority, Federal National Mortgage Association, Small Business Administration and Federal Agricultural Loans, to name a few.

[B]3. One-stop shop.[/B]

The government must get out of leasing buildings and make do with their own. There are government lands and buildings not being occupied such as the housing units in Garapan behind the elementary school. It is high time that the government should decentralize and start centralizing their own available resources. The government can bid out these lands for multiple leases after it drafts or comes up with a rendition of its own development plan for the area. The complex should be established as a corporation with the government in a sense where investors will develop the area into one or any combination of a mall to a service center or convention center and the government could provide tax breaks or some kind of incentives for the investors. And in this same complex the government will have its own offices to save millions of dollars in leases that they are now currently paying to the private sector. The investors will be the one to oversee the upkeep and maintenance of the complex or facilities and be credited for such for a win-win situation for both investor and government. This is also one way to revitalize the La Fiesta Mall in Matanza, San Roque.

[B]4. Impose real property tax and abolish Article 10, Section 5 of the CNMI Constitution. [/B]

This will generate revenue for education, infrastructure, public health, safety, energy (CUC) and telecommunication. This is going to be a controversial issue worse than Article 12 but one sure way of increasing the government revenue so that infrastructure and the like will improve as a domino effect where the quality of life in the CNMI will eventually be improved as well.

Citizens with property who cannot afford to pay real estate taxes and Article 12 being abolished, the chances of selling or leasing the property is likely, as opposed to only trees standing on the land with no improvement and/or no revenue being generated.

Citizens must be afforded the opportunity to lease or sell their property if they cannot pay taxes at least within the first five years after the law is enacted. During this time frame, these citizens should not be assessed fees for real property tax (for the first five years) whether or not their property is leased, sold or transferred as inheritance.

It is my firm belief that should these four areas be enacted into “excellent” laws, investors will flock to CNMI to do business in all facets, such as to buy land, build a house, hotels, or buildings, improve infrastructure or simply start small businesses that will be an invaluable contributor to the economic prosperity of CNMI.

Pride and ownership is the drive or motivation of investors and this is what they look for as a lifetime commitment to self and the islands in improving its economy and that is the bottom line.

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[I]Steve Jang is the general manager of
Rainbow Color.[/I]