Saipan, Tinian, Rota delegations owe $7.16M to general fund

The Department of Finance’s detailed accounting of the casino annual license fee fund appropriated to Saipan, Tinian, and Rota, showed that the three legislative delegations owe a total of $7.16 million to the general fund, according to Sen. Paul A. Manglona (Ind-Rota).
Manglona told Saipan Tribune that this is so if Finance takes the position that Year 5 of the casino annual license fee funding—$11 million for Saipan and $2 million each for Rota and Tinian—was never allotted to the respective delegations, although Public Law 20-10 specifically appropriated the replenishment of the account from Casino Gross Receipt Tax from fiscal years 2017 and 2018.
“It appears from their initial allotments that they were taking the position that Year 5 money was there, then they later changed their mind when they saw that the general fund had to be replenished,” he said.

For a six-year period, 2014 to 2019, Imperial Pacific International (CNMI) LLC paid the CNMI a total of $120 million in casino annual license fee.

Asked for comments about Finance’s status report on the casino annual license fee fund, Manglona said Finance Secretary David DLG Atalig’s certification of detailed accounting of the respective senatorial legislative delegation’s outstanding obligations to the general fund indicates that he (Manglona) was correct all along in questioning the discrepancy in Finance’s accounting.
Manglona said according to Finance, Rota owes $274,032 to the general fund, while the Tinian Legislative Delegation owes $2,078,516, or more than seven times what Rota owes.

He said likewise Saipan and Northern Islands Legislative Delegation owes the general fund $4,810,431, or almost 20 times more what Rota owes.

The senator said what he cannot comprehend is that in trying to address the interisland medical referral and medical subsistence funding needs, the administration will not extend the same financial flexibility consideration to the Rota Legislative Delegation that was provided to the two other legislative delegations.

“Funds for the Rota Legislative Delegation seem to be unreasonably held back; and for what purpose?” Manglona said.
He said House Bill 21-116, introduced by Rep. Donald Manglona (Ind-Rota) and passed by the House of Representatives back in June, re-appropriates $290,000 from Public Law 21-10 for interisland medical referral stipend and medical subsistence purposes.
He said Rota patients on interisland medical referral have not received stipend for several months now.
“Presently, they are being sent to Saipan for medical treatment without any stipend and without escorts. This is unreasonable treatment and a great injustice,” the senator pointed out.

In his Sept. 8 report about the status of the annual casino license fee fund addressed to Senate President Victor B. Hocog (R-Rota), Atalig illustrated the transactions leading to the current deficits on all three senatorial districts.
Atalig said negative balances existed on all three districts beginning Year 1 to Year 6 of the casino annual license fee fund.
He said although they have witnessed some positive balance on these accounts, these amounts remain insufficient to offset the over appropriation and allocation of the annual casino license fee, leaving Saipan, Tinian, and Rota accounts of a deficit.
For the first year of the casino annual license fee, the CNMI received $30 million in 2014.

Atalig said $2 million was appropriated each to Rota and Tinian, while $26 million for Saipan.
For Rota, $1,619,706 was allocated to pay for fiscal year 2014 restoration of the 25% pension reduction for retirees, while for Tinian, $1,202,000, and for Saipan, $12,500,000.

For Saipan, another $12,500,000 was allocated to pay the interest to former defined-benefit members or active members who terminated their membership in the DB plan. Another $1 million was appropriated by the delegation.
Atalig said for Year 1 appropriation of the casino annual license fee, Rota and Saipan had a deficit balance, while Tinian had a surplus balance.

For Year 2 of the casino annual license fee appropriation, the CNMI received $15 million in 2015.
Rota and Tinian each received $2 million, while Saipan got $11 million.

For Rota, $1,540,000 was allocated to pay for FY 2015 25% pension, while for Tinian, $1,100,000, and for Saipan, $10 million.
For Saipan, another $1 million was allocated for the delegation’s appropriation.
Atalig said the FY 2015 25% pension amounted to $12,354,284, which exceeded the allocated annual license fund.
Atalig said in Year 2, Rota had a surplus balance, while Tinian had a deficit balance, and Saipan had a compounded deficit balance.
For Year 3 casino annual license fee appropriation, the CNMI received $15 million in 2016.
Rota and Tinian each received $2 million, while Saipan got $11 million.

For Rota, $1,550,000 was appropriated to FY 2016 25% pension, while for Tinian, $1,200,000 for FY 2017 25% pension; and Saipan, $10 million for FY 2016 25% pension.
For Saipan, another $1 million was also for delegation’s appropriation.
For Year 3, Atalig said, all three islands had a deficit balance.

For Year 4 casino annual license fee appropriation, the CNMI received $15 million in 2017.
Atalig said that, in September 2017, Public Law 20-10 passed, which allocated $2 million each to Rota and Tinian, and $11 million to Saipan.

For Saipan, he said, $1.5 million is continuously appropriated for the Saipan Higher Education Financial Assistance (SHEFA) and $9.5 million to be appropriated by the Delegation.

Under Public Law 20-10, Atalig said, the first $22 million of the Casino Gross Revenue Tax generated from the exclusive casino shall be earmarked and continuously appropriated to supplement the payment of 25% of class members’ full benefits and the bonus of all retirees of all three Senatorial Districts.

The secretary said a specific section of Public Law 20-10 freed up the 25% pension reduction restoration allocation under the statute and provided more annual license fee funding for allocation.

Rota and Tinian each received $2 million of the casino annual license fee, while Saipan got $11 million.
Atalig noted that there is no reimbursement to Rota for the FY 2017 25% pension reduction restoration because there was no law passed appropriating for this using the annual license fee.

Ataig said for Tinian, the district also received an additional $1.2 million as reimbursement for their FY 2017 25% pension reduction restoration appropriated using the casino annual license fee in the previous fiscal year.
For Saipan, $10 million was paid for FY 2017 25% pension, and $1.5 million for continuous SHEFA.
Saipan also received an additional $10,146,315 as a reimbursement for their FY 2017 25% pension reduction appropriated using the annual license fee.
For Year 4, Atalig said all three districts had a surplus balance.
For Year 5, the CNMI received $30 million in casino annual license fee in 2018.
Rota and Tinian each received $2 million, while Saipan got $26 million.
Atalig said respective delegations appropriated the annual license fee accordingly mainly to pay back the 25% pension reduction from previous fiscal years and the interest to active members who terminated their membership in the DB plan.
Atalig said due to Super Typhoon Yutu’s devastation in 2018, available funds at the time were diverted for immediate disaster response efforts.

He said there was no annual license fee allocation made in Year 5.
For Year 6 of the casino annual license fee appropriation, the CNMI received $15,502,570 in 2019.
Rota and Tinian each received $2 million, while Saipan got $11 million.
Atalig said Rota made a $290,000 partial payment of the outstanding obligation to the general fund, while Saipan appropriated $502,570 in sixth-year adjustment reserved to the general fund.
For Year 6, Atalig said all three districts had zero balance.