Further cuts to FY 2019 budget

The Torres administration announced Thursday last week that it will cut the fiscal year 2019 budget further by $17.9 million.

The Department of Finance recommended the amount “to ensure the fiscal viability of the Commonwealth for the long term,” according to an administration statement.

“While the CNMI continues to show signs of recovery through improved overall col-lections from the previous quarter, our administration is taking the necessary steps to curb government spending as our economy recovers,” said Gov. Ralph DLG Torres.

The administration blames the shaky economy on the devastating effects of Super Typhoon Yutu, which levelled Saipan and Tinian in October 2018.

Torres described the budget cuts as a “very difficult decision” but necessary. He as-sured that payment to retirees and meeting payroll for government employees will con-tinue to be prioritized.

He said the CNMI government has already taken the necessary steps to curtail costs, which include cost-containment measures on non-federally funded programs and agen-cies, curtailment of travel, and elimination of open accounts.

“It is important to remind everyone how we got here, and even more important to remember what we recently experienced,” he added in the statement.

Super Typhoon Yutu is deemed the strongest storm in U.S. history since 1935, bringing winds and gusts up to 200 miles per hour on the islands of Saipan and Tinian, causing much damage to homes and businesses, displaced many residents and brought the economy to a standstill for about two months.

Damage assessments found that 532 homes were destroyed and 430 homes suf-fered major damage. A total of 832 residents were placed in shelters across the three is-lands.

The effects of this loss of economic activity lingered through the first and second quarter of fiscal year 2019 and are still widely felt today, with a 39.8-percent decline in tourist arrivals in March.

Based upon the revised projections submitted by the Department of Finance, the Torres administration’s reductions amount to $29.9 million, which adjusts the gross budgetary resources to $228.17 million. This revises the FY 2019 budget authority to $141.5 million.

Lt. Gov. Arnold I. Palacios emphasized that Yutu’s impacts cannot be forgotten as the government and the community continues to recover.
“This administration has not forgotten the devastation cause by Yutu because we made zero revenue in the first two months after the storm due to an inoperable airport and an industry that did not see visitors or economic activity within that period of time. Revenue was expected to drop, and it required drastic, but necessary decisions in order to not drive up the deficit. That’s what a responsible government had to do,” Palacios said.

“This government had to be proactive in responding to the disaster through an in-novative approach that saw unprecedented collaboration between local and federal part-ners. In order to meet the demand of recovery, local resources had to be expended for the upfront costs of the storms’ impact. Evidently, it led to an efficient response and faster re-covery through the expedient delivery of public services so that our people could feel whole again,” he said. (Saipan Tribune)