CNMI government budget returns to 1990 level

 The CNMI’s fiscal year 2012 budget of $102 million is back to nearly the same level as it was 22 fiscal years ago-in 1990-when the budgetary resources available for appropriation breached the imaginary ceiling of $100 million.

Had the Fitial administration continued to fund the Department of Public Health, the fiscal year 2012 budget would be some $120 million, much closer to the fiscal year 1990 budget.

With the birth of the garment industry in 1983, the CNMI’s budget went from less than $50 million, earned mostly from tourism, to $81 million in fiscal year 1989, before breaching the $100 million mark in 1990.

With the CNMI’s twin economy of tourism and garment in full throttle, the government’s annual budget went from $120 million in fiscal year 1990 to $190 million in fiscal year 1995.

The budget then breached the $200 million mark in fiscal year 1996 before peaking at $247 million in fiscal year 1997.

Since then, it has been almost downhill.

The Asian economic crisis of the late ’90s, followed by the Sept. 11, 2001, terror attacks, the 2003 SARS threat, the bursting of the Asian bubble, the wars against terror, the pullout of Japan Airlines, the demise of the garment industry, and to a large extent the lack of austerity measures by the government led to the steady drop in government collection from taxes and fees.

It went down to $235 million in fiscal year 1998, to $211 million in 1999, and to $206 million in 2000. It went up slightly to $214 million the following year, went down again, and went up again slightly.

By 2006, the budget was down to $191 million and has since steadily dropped until it was only $122 million in fiscal year 2011 and $102 million in fiscal year 2012.

House Speaker Eli Cabrera (R-Saipan), a budget analyst in 1989 until he became the governor’s special assistant for management and budget during the time of then governor Froilan Tenorio in 1994 to 1998, said that going back to the budget level of some 20 years ago could mean the CNMI “is heading for another recession.”

If the Fitial administration implements another across-the-board budget cuts in fiscal year 2012, which started on Oct. 1, then the CNMI will have to live within less than $100 million to operate.

With federal labor and immigration still on shaky ground, utilities rates still too high, the lack of a new industry and pullout of still more businesses, the government faces further cuts in collection from taxes and fees.

“I am hoping that we’ve already seen the worst, that we’ve already hit rock bottom. If the economy gets worse than it already is, we’d be in real trouble,” Cabrera told Saipan Tribune.