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SAIPAN, CNMI (Saipan Tribune, May 1) - Describing the
Commonwealth economy as "in pretty darn good shape," Gov. Juan N.
Babauta challenged the Legislature yesterday to do its part and immediately act
on nine proposals that he said are intended to build on the gains that his
administration has achieved since coming into office.

Babauta also threw down the gauntlet to the business community
with his bid to push for an increase in the minimum wage, saying the
Commonwealth cannot expect to have a First World economy if 76 percent of its
population is earning Third World wages.

The Governor delivered his State of the Commonwealth Address at
the Multi-Purpose Center in Susupe yesterday morning in front of a jampacked
crowd that interrupted his speech four times with applause. Besides ranking
officials from the Executive, Legislature, and the Judiciary, prominent faces
from the private sector and the diplomatic community also attended the occasion,
including former governor Larry Guerrero.

Ramona Jones, who is special economic advisor with the Interior
Department, was also present, representing Deputy Assistant Secretary of the
Interior David Cohen.

Babauta outlined the accomplishments that his administration has
achieved in the last year and identified six priorities in the coming year:
Education excellence, economic development, the environment, performance
government, public health, and public safety.

Babauta reiterated several times the need for the Legislature to
act on all nine administration-sponsored bills that are now pending with the
Legislature, which he said are key to achieving the goals identified in the six

The nine bills are the education initiative, the proposal to
raise teacher salaries, the plan to make the Northern Marianas College
attractive to international students, the legislation to clean up the Dai-Ichi
drainage, the privatization of the Group Health and Life Insurance, the $228
million Fiscal Year 2004 budget, the Integrated Fiscal Proposal that seeks to
raise taxes and fees, the legislation for the Garapan Improvement District, and
the bill to raise the minimum wage.

'Strong economy'

Comparing the CNMI to Guam and other American states, Babauta
stressed that the CNMI economy is in relatively better shape, with a core
economy that has remained intact.

"The state of the Commonwealth is stronger today than when
the Lt. Governor and I took office. Tourist arrivals are up. Exports are steady.
And government has met every payday. That's why I say we are strong today. We
accomplished this by making the decisions and taking the actions these times
require," he said.

Faced with a $24-million deficit, Babauta said they had to make
difficult decisions that included cutting spending across-the-board by 7
percent. Babauta boasted that his administration also cut the number of
government employees in the Executive Branch by 151.

To keep vital services alive, Babauta said they used two,
short-term strategies: Rebuild tourism by investing an extra $2.6 million in
promotion and closing down the Puerto Rico dump; and build capital improvement
projects to pump money into the economy.

"Our efforts paid off. For the twelve-month period ending
today tourist arrivals are up 66,000 over the previous year-a 16 percent
increase," he said.

On capital improvement spending, Babauta said the government
spent $36 million last year, which he described as more CIP spending than ever
before in Commonwealth history.

Babauta said that, although much has been accomplished toward
guaranteeing the continued education of the CNMI's 10,000 school children, more
remains to be done.

Although the administration's proposal to raise teacher salaries
was rejected last year, the new $228 million budget submission again raises the
pay for teachers-a move that Babauta said is supported by the Fiscal Committee
of the Board of Education.

On economic development, Babauta said his administration ended
the era of confrontation with the U.S. government, which he said has saved the
CNMI millions of dollars that were once paid to lobbyists.

Additional strategies identified in the administration's
approach to economic development is the Garapan Revitalization and enacting laws
that make it easier for investors to do business in the CNMI.

To further support the Garapan Revitalization, Babauta said he
will be submitting legislation to establish the Garapan Planning Improvement
District that seeks to remove the poker establishments, strip joints, and
massage parlors from the area.

Babauta said he would also be submitting to the Legislature a
proposed minimum wage bill patterned after the American Samoa model. This means
a tiered wage system, with different minimum wage levels set for different

"And if the Saipan Chamber of Commerce says that the sky is
going to fall [if we raise the minimum wage], then let it fall," he said.

In addition to these two new proposals, Babauta said that
building an education industry-called the Pacific Gateway project-is also
expected to bring new dollars into the economy through an expanded international
student base.

On the environment, Babauta cited the closing of the Puerto Rico
dump and opening the Marpi landfill, the implementation of a recycling program
that he said has already reduced the total waste stream by 25 percent, and the
completion of the PCB clean-up in Tanapag.

He acknowledged the role played by the private sector-the
Tanapag Action Group, TREES, and the Tournament of Champions-in making
significant strides in the sphere of environment.

As part of efforts to achieve Performance Government, Babauta
said the budget he submitted this month contains outcome measures for the
departments of Labor and Immigration, Finance, Public Health and Public Safety,
consolidation of government services to increase efficiency, and out-sourcing of
government functions.

Besides teachers, Babauta also batted for an increase in police
officer salaries. With police overtime increasing from 30 percent of wages in
1999 to 37 percent of wages last year, Babauta said this only shows that police
officers are underpaid and overtime is used to make up for the difference.

This was the first time that Babauta delivered a State of the
Commonwealth address since he became governor in January 2002.

May 1, 2003

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