Senator concerned with PSS casino tax appropriations

A Rota senator is concerned that the total casino gross revenue tax appropriations to the Public School System since fiscal year 2017 represents only 19 percent of total CGRT, as opposed to the constitutional mandate of 25 percent.

Sen. Paul Manglona (Ind-Rota) cited a recent Legislative Bureau report, saying he remains concerned about the Legislature’s appropriation of less than 25 percent of revenues, which includes the CGRT.

The CGRT is obtained by taxing 5 percent of revenue generated by the casino.

PSS has been appropriated a total of over $22 million in CGRT from fiscal year 2016 and 2017. The total CGRT comes in at over $116.25 million for both fiscal years.

The $22 million is only about 19 percent of $116.25 million, and is therefore not compliant with the CNMI Constitution, which states that PSS is entitled to 25 percent. In order to comply with the CNMI Constitution, PSS needs to be appropriated over $29 million.

The Legislative Bureau report states that for Public Law 19-75, or the first supplemental appropriation of additional funds derived from the fiscal year 2016 CGRT, PSS got $10.2 million of the total $40.9 million. That makes P.L. 19-75 compliant with the CNMI Constitution.

P.L. 20-42, which noted a total CGRT of over $46 million, allocated $11.8 million to PSS and is also compliant with the constitution.

The problem is that the Legislature also passed three more CGRT appropriation bills in between those two public laws, which did not allocate anything to PSS.

P.L. 20-04 was enacted to take care of the land compensation judgments issued by the CNMI Judiciary, which had deadlines. P.L. 20-04 took care of the CNMI’s largest land compensation debt of $16 million.

P.L. 20-09 paid $7 million to the Settlement Fund balances owed since fiscal years 2014 and 2015, when settlement fund trustee Joyce Tang issued an ultimatum to the CNMI government, threatening to cease assisting the government with the processing of the 25 percent payments to retirees. Retiree benefits were not disrupted.

P.L. 20-16 retroactively addressed balances owed to employees whose salaries got stuck at Step 12.

Manglona told Saipan Tribune that he believes the Legislature’s attempts to “divert” tax revenue into special accounts undermine the intention of the constitution.

“As I have stated in the past, this issue has to be resolved once and for all through the Supreme Court certified-question route,” he said.

According to the same report, PSS was appropriated a budget of over $89.9 million in fiscal year 2018, $38.8 million of which were from federal grants.

The Legislature appropriated a total of over $36.6 million in funding from the general funds, which will go to salaries, board member salaries, and the Cooperative Education Program. PSS’ other sources of funding include the Tobacco Settlement (Public Law 13-37); the Compact Impact agreement; the Tobacco Control Fund, and the CGRT. Besides the general fund, PSS was appropriated at least $14.3 million in earmarks and alternate sources of funding.