STRAPPED MARIANAS GOVERNMENT MUST CUT PAYROLL

Editorials

Mariana Variety

SAIPAN, CNMI (April 17, 2008) -Why not?

Last year when the Legislature gave the governor his austerity measure and 100 percent reprogramming authority, people wondered what lawmakers left for themselves, by way of work, that is. As it was also an election year, they overrode about 12 vetoes. It was the "popular" thing to do -- but at the cost of grossly complicating the Commonwealth of the Northern Mariana Islands’s (CNMI)’ fiscal situation. One of these overrides was on House Bill 15-94, which lowered the power rate and made it impossible for CUC to pay for higher fuel costs.

This year the "new" Legislature offered the governor a vastly expanded austerity measure that included holiday Fridays, no-pay holidays, civil service conversions, a cut in the government contribution to the Retirement Fund from 18 to 11 percent and 100 percent reprogramming authority. All the lawmakers wanted, in return, was a few reporting requirements. But this was flatly rejected by the governor. Now the Republican majority in the House of Representatives is considering an override.

Instead of embracing these austerity measures, across the board 15 percent cuts for almost "everyone" -- except for legislative and executive officials, some constitutional positions, the judiciary, some independent agencies, essential service employees and civil service conversions -- why not a well-thought out legislative initiative that identifies funds for a fuel subsidy to give all consumers relief, and a 7 percent cut across the board to include everyone?

Last year, the administration indicated that over 300 employees would need to be cut to allow the government to cope with increased fuel costs and reduced revenues. Since then, however, these employees have been given extensions, the latest of which allows them to remain on their posts until June. CUC, for its part, has been on the verge of running out of fuel for 90 days -- and yet fuel purchases still occur.

According to the administration, CUC should cut its budget to come up with its operational shortfall. We agree. CUC should cull its ranks. Long-term mismanagement and poor planning have placed the agency in its current abysmal position. Not surprisingly, there is little sympathy for CUC’s management. Although we have to concede that taking directions from administration officials and poorly informed legislators may be punishment enough.

Businesses, however, cannot function this way. For the private sector, the numbers have to add up. If revenues are down and not likely to go up any time in the near future, cost-cutting measures are instituted. But businesses don’t impose the mindless cuts preferred by government officials. They know that you can only cut so much before services start being effected.

No one, at any rate, has discovered oil or platinum in the Northern Marianas. The islands won’t be hit by a sudden boon. It is only by acting rationally that the CNMI can survive these next few years. But to do what is politically expedient -- to simply pass more "austerity" measures and provide fuel bailouts -- requires no planning or forethought. Public services are already suffering and the next round of cuts must be the number of employees. There is no longer a rational alternative.

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