Let’s be honest

Editor’s Note: The author delivered the following statement at the House of Representatives session on April 29, 2019.

I’ve spent these past weeks pondering a single question about the state of our financial affairs: How did we get here?

Over the weekend I took some time to reread the Governor’s State of the Commonwealth address from August 2018. The one where he says “progress” 24 times.

It’s the speech where he describes “the fastest economic growth in the country,” how our GDP surpassed the $1 billion mark, and how we reduced our deficit by more than half.  The one where he even claims that the central government had settled its arrears with CUC.

In August 2018 he said, “Today’s economy is strong.”

Those words ring hollow today.

We came to find out, just a few months after that speech—conveniently, after the election—that we actually ended the fiscal year with a $25 million deficit.

So what was all that “progress, progress, progress” about? Smoke and mirrors? Delusion? Lies?

One thing Gov. Torres said that was true, was that “the state of our commonwealth today will be measured by those who follow us. Our children will live with the outcomes of our decisions today.”

Unfortunately, I can’t say that I’m proud of what we are contemplating today—borrowing from our children, from their inheritance, because we don’t have the money to pay our obligations today.

So if we can’t be proud, let’s at least be honest.

Let’s be honest with our people and acknowledge that we are in this situation today because of gross financial mismanagement.

Let’s be honest and admit that the governor should not have authorized 2.5 overtime for Cabinet members who were not eligible by law or their own contracts.

Let’s be honest and admit that we should not have given massive pay increases for elected officials and Cabinet members last year.

That maybe, instead of issuing millions in retirement “bonuses,” we should have used that money to pay down our outstanding, humongous obligations to the retirement settlement fund, so that we don’t have to borrow from MPLT to do exactly that today.

That maybe, all along, back when the casino was paying taxes in the tens of millions, we didn’t have to spend absolutely every single penny and then some. We should have been setting aside some money for a rainy day. A day like today—when the casino has paid a measly $41,000 in gross revenue taxes since the beginning of this fiscal year.

Let’s be honest and say that this casino is not living up to its overblown promises. That it’s drowning in bad debt that far exceeds its profits. That it’s not paying its taxes, not paying its vendors, not meeting deadlines or permit conditions, not hiring more U.S. workers and, in fact, has been laying off employees by the hundreds.

IPI doesn’t seem to have the money to finish one project in Garapan—yet we still, somehow, have managed to give them another prime piece of public property in Marpi.

And here we are, today, borrowing from our public lands trust. We don’t have the cash to pay typhoon overtime to deserving front-line employees, in part because this administration prioritized Cabinet members who shouldn’t have gotten overtime in the first place. We don’t have the cash to pay vendors. We don’t have the cash for within-grade increases for civil service employees. We barely have the cash for current payroll, including all the huge salary increases that were given to top officials last year.

The bill on calendar today, 21-44, says we’re not borrowing for operations because that would be unconstitutional. But let’s be honest and say that we are borrowing to pay bond obligations and the settlement fund so that we can free up some cash for operations.

The governor is quoted in today’s papers saying he has nothing to hide—revenues are down by $30 million he says, and government expenditures have quadrupled, he says.

But he doesn’t get off so easily, just saying that. He has hidden plenty. There were no timely disclosures last year. We don’t even believe the disclosures we’re getting now. We still don’t know if the initial across-the-board cut was supposed to be 5 percent per month or 15 percent per quarter. But we do know the cuts to operations across this government have been much greater than either figure. And we suspect the shortfall for this fiscal year may be much greater than the $30 million the governor has most recently announced.

How did we get here? How did we go from last year’s boasts about progress, prosperity, and record-breaking budgets, to deficits, shortfalls, and austerity measures just a few months later? We cannot blame everything on the typhoons. Let’s be honest about that.

I think it’s time, Mr. Speaker and members, to call in the governor. Call in the Finance secretary and former Finance secretary Larissa Larson. Subpoena them if we have to. How did we get here? And just as importantly, where do we go from here? Let’s do some real oversight, and ask the hard questions that demand answers.

Tina Sablan is a member of the CNMI House of Representatives in the 21st Legislature.