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By Annie Ruth C. Sabangan Variety News Staff

SAIPAN, Northern Mariana Islands (August 20, 2002 – Marianas Variety)--The rift between the administration and the House leadership has apparently worsened after Gov. Juan N. Babauta delivered what several lawmakers believed was a speech to discredit Speaker Heinz S. Hosfchneider and other lawmakers critical of the administration’s performance.

During the House session yesterday, several lawmakers questioned the credibility of Babauta’s speech, which they said contained serious mathematical errors and "convoluted assumptions that produced distorted justifications."

Lawmakers said they expected the governor to iron out his differences with them and try to arrive at a consensus on how to manage the fiscal affairs of the commonwealth.

But several House members said they were dismayed that the governor spent 45 minutes reading his 10-page speech that sounded more like a rebuttal to every statement that the speaker had made on the government’s financial condition.

Mathematical errors

Rep. Stanley T. Torres, R-Saipan and chairman of the House Committee on Ways and Means, said it was Babauta who should check his math.

"The governor came here with his one meter whip and he whipped us all like Cub Scouts. I’m sorry to say this but the governor made very insulting remarks using a formula that is totally wrong. I don’t know what kind of math he’s got. But when I calculated it (his) formula was a mistake," he said.

Earlier, Hofschneider, R-Saipan, told the media that the cost of operating the government was $75,000 per hour.

But Babauta in his speech repeatedly said his critics should "check their math" as only $24,000 per hour is supposedly spent on running the government.

When Torres did his homework and checked his math, he said the governor apparently divided $210 million by 24 hours a year and it was this that produced $24,000 per hour of working days.

But Torres said it was obviously false to divide the expenditure by 24 hours as no government employee works all day and night.

Even dividing the working hours with $210 million was wrong, according to Torres, since the total personnel cost is not $210 million but only over $160 million per year.

He said the total number of working days of every employee per year is 260 or 2,080 hours yearly, including holidays.

Divide the $160 million personnel cost per year by 2,080 total number of working hours annually will equal to $76,923 per hour—which Torres said is near Hofschneider’s calculation that the cost of operating the government is $75,000 per hour.


House Floor Leader Jesus T. Attao, R-Saipan, questioned the governor’s report on the $28 million deficit, which the administration indicated was largely caused by the past administration.

‘I’ve done my homework and when I calculated (the expenditure) from Oct. 1, 2001 to Jan. 13, 2002 (or during the last months of the Tenorio administration), the $28 million is not a true figure. That the former administration had only three months and 15 days for putting up a $28 million deficit is totally incorrect. We have to correct that. The deficit was (caused by) the past and the present administrations. I disagree with the information that the governor provided the Legislature," he said.

Attao also expressed dissatisfaction with the administration’s failure to give a chance to members of the Legislature to "rebut" the governor’s speech.

"We did not have the chance to rebut the speech of the governor on the state of the CNMI’s economy. It was unfair not to question the governor on his remarks. It was only fair that we be given the chance to explain our arithmetic here," he said.

He said the House should ask for a meeting with the governor.

But the speaker felt that there was no such need to call the governor back "unless there is a subliminal urge for more pain."

"Obviously, the administration does not see it’s necessary. I thought Friday’s coffee hit wonders for my jitters. I thought the Ming Palace meeting did well in our efforts to work for the common good," Hofschneider said.

Sometime during the second week of August Babauta and Hofschneider met over a cup of coffee. On Aug. 14, two days before the passage of H.B. 13-170 or the $213 million budget bill, a majority of House members met with the governor at Ming Palace, which was also believed as another move to bridge the gap between the administration and House leaders.

The speaker, in his remarks during yesterday’s session, said the previous administration’s last operational expenditure was met with a balanced revenue of $206 million.

He said what was "delusional" about the speech of the governor was when Babauta claimed that "the government was spending more than it was taking in, spending at a rate of $225 million even though revenues were projected to be only $197 million."

He said the governor’s statement "created an artificial deficit."

Missing the boat

Rep. Arnold I. Palacios, R-Saipan, said he "forgives" the governor for "missing the boat and missing the opportunity" to meet eye to eye with the House. However, he said he could not deny that what happened last Friday "failed to meet (his) expectations." The Senate, the House and the administration were supposed to "cooperate" and "address the problems that we are facing," Palacios said.

"I thought that it would have been a good time to sit down and set aside the math. The math is really useless. Statisticians could go around the figures," said Palacios.


The speaker said it was not appropriate for the governor in his speech to compare CNMI government operations to that of Hawai‘i and California.

In his speech, Babauta said the CNMI government operations of $24,000 per hour is much less than Hawai‘i’s $600,000 per hour and California’s $12 million per hour.

"I think it’s silly for us to compare ourselves with the big states," he said.

He said the CNMI does not have the capability "to really spend for something we don’t have and turn around and say we are going to borrow money and pay for some of these unauthorized expenditures."

"What we need to do is to focus and look at how to expand the economic base of the commonwealth at the same time looking at how we could efficiently deliver public programs and services," he said.

Hofschneider said the CNMI’s capability "is quite unique in itself and distinct from other states where they compete for billions of dollars in funds" and that even if they go on deficit spending, they have the capability to increase productivity, thereby curing the deficit they incurred for such expansion.

The new administration should not "condone and come up with rhetorical defenses and justifications to continue" deficit spending, he said.

The speaker also noted that "there are over 20,000 to 30,000 non-resident workers and that means that there are over 20,000 to 30,000 opportunities out there in the private sector."

What needs to be done, he said, "is to be creative in re-tooling and making sure that the private sector is at par with the benefits that the government is offering."

The challenge now for the CNMI leadership, according to the speaker, is to set a transition period for the transfer of government employees to the private sector.

"The government obviously cannot afford to be the main employer of CNMI residents. The economy is not improving and thus we need to do something to transition a lot of employees to the private sector," he said.

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/ Marianas Variety.

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