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Govt overspends by $2M-$3M
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Posted on Mar 30 2009
When the second quarter of the fiscal year ends today, the CNMI is expected to incur another deficit of several million dollars.
For the months of January through March, the CNMI government overspent by $2 million to $3 million, according to Finance Secretary Eloy Inos.
Added to last quarter’s deficit of $4.5 million, the government is looking at a growing deficit of $6.5 million to $7.5 million as the fiscal year reaches the halfway point.
“Just looking at what happened, or didn’t happen, we’re probably looking at maybe on the expenditure side, the deficit side, probably about half the over-expenditure of the first quarter,” Inos said.
A reduction in the employers’ contribution rate helped the government cut the deficit amount this quarter, Inos said.
The Finance secretary said he anticipates overspending by $2 million to $3 million in the next two quarters. At that rate, the government could incur a deficit as high as $13.5 million for Fiscal Year 2009.
The administration has repeatedly called on the Legislature to enact more cost-reduction measures like austerity Fridays and unpaid holidays, in an effort to stay within the spending limit. The administration drafted a bill that was introduced in the House of Representatives in February, but it has yet to be voted on. Last week, Esther Fleming, the governor’s special assistant for administration, said she was no longer counting on the lawmakers to pass the austerity measure bill.
Fitial and Inos have said they will not allow for deficit spending.
During Fiscal year 2008, the government initially incurred a deficit of approximately $18 million, but a last-minute $17.2 million payment from the U.S. Treasury as final settlement on a long-standing cover-over issue and additional revenue collection ultimately helped the government accrue a surplus of $110,000 for the year.
