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SAIPAN, CNMI (Saipan Tribune, January 29) – Commonwealth of the Northern Mariana Islands Government spending is down by nearly US$19 million in the first quarter of fiscal year 2007, compared with the same period last year.

A report by the Office of Management and Budget showed the government spent US$38.82 million between Oct. 1, 2006 and Dec. 31, 2006. This represents a 32.5-percent reduction from government expenditures from October to December 2005, which amounted to US$57.53-million.

The suspended employer contributions to the NMI Retirement Fund accounted for US$5.16 million of the reduced cost.

The biweekly austerity holidays, as well as other cost cutting measures affecting personnel, yielded US$6.78 million in savings. This amount includes reductions in wages and salaries of civil service members (US$1.59 million), wages and salaries of ungraded personnel (US$935,769), overtime pay (US$880,094), and lump sum annual leaver payments (US$691,721), among other items.

According to press secretary Charles P. Reyes Jr., the reduced personnel expenses could also be attributed to the smaller size of government. The number of government employees, previously estimated at 5,000, dropped to 3,679 as of Sept. 2, 2006. This has since further declined to 3,585 as of Nov. 11, 2006.

"We are continuously trying to keep personnel costs down," Reyes said in defense of the Fitial administration's hiring practices. The opposition in the House of Representatives recently revealed the Executive Branch had hired 150 new employees for mostly non-critical positions since June 2006.

In addition, the government has reduced non-personnel costs by US$6.77 million, the OMB report showed. Part of this is a US$4.18-million cut in government subsidy to the Commonwealth Utilities Corp., including power, water, and sewer. Spending on general medical supplies was also reduced by US$1.08 million; professional services by US$861,651; and travel by US$283,738.

Furthermore, OMB's report showed that government spending totaled US$14.7 million in October 2006, US$12.26 million in November 2006, and US$11.87 million in December 2006.

Including the projected monthly utilities expenses of US$875,000, government expenditures averaged US$13.81 million a month in the first quarter of FY2007.

This means that, if the government keeps at this spending level, total expenditures will reach only US$165.78 million by the time the fiscal year ends on September 30, 2007.

The FY2007 appropriation act set a spending limit of US$193.5 million for the CNMI government. But with the recent garment closures and the impending minimum wage hike, the government projects that revenue collections may be lower than this projection.

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