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By Moneth G. Deposa

SAIPAN, CNMI (Marianas Variety, Aug. 29) – Commonwealth of the Northern Mariana Islands Washington Representative Pete A. Tenorio has described the newly signed austerity holiday law "a mistake" that will negatively impact the Commonwealth of the Northern Mariana Islands government and the federal grants it receives.

In a letter to Governor Benigno R. Fitial, Tenorio said the steps taken by the administration to address the government’s financial problems are "more critical than the problems themselves."

"I firmly believe that the furlough plan that will be implemented next month will in the long run negatively impact our local government and our federal grants and is a mistake," Tenorio said in a letter dated August 28.

Press Secretary Charles P. Reyes Jr., as of press time last night, had yet to respond to this reporter’s request for comment.

According to Tenorio, the new law eliminates the existing expenditure authority of statutorily delegated officials, and appears to place all such authority with the governor.

"The proposed furlough penalizes those agencies and offices that have already met earlier mandatory budget reductions and rewards those who have not. The ‘fairness’ of the furlough plan, I believe, causes more problems than it is meant to alleviate," he said.

Tenorio said he is concerned about the furlough being applied to federal programs.

"Furloughing federally funded personnel will disrupt the smooth implementation of grants and could result in the loss of federal dollars, which are badly needed," he said, adding that federal programs are "in essence contracts with federal agencies...."

Tenorio cited three major areas of concern: a loss of funds due to the loss of matching funds which many grants require; a loss of federal funds due to a decrease in productivity; and a violation of Maintenance of Effort Agreements that have been signed with federal agencies.

He said federal law allows the Commonwealth to carry over grant funds from one year to the next if they are not fully expended. "These programs can actually increase spending. With a little creativity and, of course, approval from the grantor agency, they should be able to come up with projects or activities that would allow for increased spending," he said.

With Covenant 702 CIP funds, Tenorio said there are some funds that can be used to create jobs for Commonwealth residents. "With a balance of over US$50 million this is a veritable gold mine that can be used to stimulate the economy," he said.

Tenorio said 702 funds and projects could also be used to purchase materials and equipment, as well as pay stipends to public school students and those at Northern Marianas College.

"The Commonwealth government is too large and needs to be reduced. (But) I fear that reducing it without creating jobs in the private sector or providing needed skills will just lead to further economic problems," he said.

August 30, 2006

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