‘No exemptions to austerity’

With a second tranche of austerity measures set to go into effect on March 15, some government departments have asked to be exempted, to no avail.

“Every department has requested for exemption. At the moment there’s no exemptions being honored,” Finance Secretary David Atalig said.

Based on the directive, all law enforcement agencies are the only exception in terms of the 64-hour and 16-hour reduction. Law enforcement, such as the Department of Fire and Emergency Medical Services, is minimizing their overtime to the allowable maximum for 24-hour shifts.

“DFEMS, the police, and Customs, as law enforcement, are on reduced austerity also, but they are on a 24-hour operation as well. They’re being reviewed in terms of scheduling,” Atalig added.

The Finance secretary revealed that the requests for exemptions are mainly from federal programs, justifying that they are fully-funded by federal grants. Atalig explained, though, that it is a policy of the administration that the reduction be made across-the-board and that no government employee, whether they are federally or locally funded, will be exempted—it is the policy across all government employees.

“The federal programs are requesting for exemptions but, as we experienced last year in the austerity, we did not grant exemption to all federal programs, only those enforcement federal programs like [the] brown tree snake [program] because, just like Customs, they’re all imports or inspections,” Atalig added.

There is no more reconsideration, and the austerity will come this March 15.

“We’re taking the worst-case scenario. We’re observing how this coronavirus will affect our economy. I still need to fund full payrolls until the end of March,” he added.

Atalig is anticipating reductions in revenue collections, which would prove to be a challenge given that 80-hour payrolls will still need to be paid, at least for the next two pay periods.

“The challenge is the effect of the arrivals from February. I’m going to see reductions in revenue collections, especially from hotel occupancy tax, the spending on tour operators and our tourism industry—we’re going to see a drop.

“I’m anticipating a drop in revenues from March and the same time I need to pay 80 hours for payroll for the next two pay periods. So it’s going to be a challenge,” Atalig said.

He is hoping, though, to get better news as weeks go on, from which adjustments could be made. “We are committed to doing monthly reviews of all our revenues, and analyzing if we need to either reduce more or take further action.”

The CNMI, with the rest of the world, has been monitoring the effects the coronavirus on tourism and the economy. Guam, the nearest to Saipan, has been experiencing challenges in tourism as well, but not as bad, given that 40% of the CNMI’s tourists are from China, and another 40% are from South Korea.

Atalig said that they are hoping that the arrivals from Japan could help, but even with that, “it’s not going to replace the challenges we have with the direct flights with China.”