ECONOMIC CRISIS MAY FORCE CNMI TO LAY OFF EMPLOYEES

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By Benhur C. Saladores

SAIPAN, Northern Mariana Islands (April 23, 1998 - Saipan Tribune)---In the wake of the deepening economic downturn in the Northern Marianas, the local government may be forced to lay-off workers in a drastic effort to trim down the bloated bureaucracy, including its overall spending level, officials said yesterday.

Although Governor Pedro P. Tenorio assured that he will not fire employees, the local chief executive underscored the need to bring down the costs of maintaining a bureaucracy which entails some $190 million in government funds each year to pay for salaries and benefits.

"We are working on it right now and we are trying our best to make our government continue to work," the governor told reporters in an interview.

But Rep. Karl Reyes, Chairman of the House Ways and Means Committee which reviews government budget and revenues, said he would look into the possibility of cutting back government positions, including full-time employees, to limit expenditure for next fiscal year.

"We will be looking at personnel," the representative explained. "That will be the first option so that we can keep the departments running without sacrificing services to the community."

Reyes, who expects to receive budget submission for FY 1999 by the Teno administration next month, pointed out that vacant positions should not be filled, as part of the measure to reduce spending on payroll.

He also recommended that the local government must stop hiring people for the various departments and agencies without determining the necessity of their functions in the bureaucracy.

"We should be mindful that we shouldn't allow the government to expand more at the level that it is right now," Reyes said in an interview.

The CNMI government is estimated to have some 6,000 employees in its payroll, the biggest employer in the islands, spending as much as $6 million each pay period for salaries alone, according to the Ways and Means Committee head.

In a bid to shore up its dwindling revenues, Tenorio has implemented austerity measures such as restricted travels for local officials as well as elimination of some of its contractual employees.

While the Governor said enough savings have been gained through these belt-tightening efforts, Reyes maintained the measures will have to continue until the CNMI fully recovers from the current crisis.

"They should be implemented for much longer time even if we get into that recovery period. We will still have to assess whether there's true recovery so that we can foresee if it's just temporary," he said.

The chance of a turn around for the economy, however, is clouded by the persistent financial turmoil and market plunge troubling most Asian countries, especially Japan, which has been the traditional source of tourists and investors for the CNMI.

Tenorio last week further trimmed down projected revenues for this year to $233 million, from the $247 million earlier predicted by finance officials, largely due to the continued decline of tourist arrivals here.

According to Reyes, the new income figure is poised to bring at least $14 million in budget shortfall, as departments and agencies are currently running under the same spending level as with the 1997 appropriation of $247 million.

Aside from that, the Teno administration will have to find other funds to pay back about $29 million in tax rebates, as well as retire overdue deficit amounting to $35 million and some $15 million to pay the new salary raise for civil service employees.

The once-robust economy of the Northern Marianas has been derailed by the faltering tourism industry and the closure of some 131 businesses, topped by zero foreign investments here since the tail end of last year to date.

http://www.tribune.co.mp

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