CNMI Expects Slight Surplus At End Of Fiscal Year

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$5 million to be used for ‘prior obligation’ says Governor

By Haidee V. Eugenio

SAIPAN, CNMI (Saipan Tribune, September 2, 2013) – The CNMI government expects to close the fiscal year on Sept. 30 with a few million dollars extra in its pocket—as much as $5 million—as a result of steady growth in tourism arrivals and strict expenditure controls, according to Gov. Eloy S. Inos yesterday. However, he said the money will be used to address prior obligations instead of being set aside for a 2014 supplemental budget that will go to the NMI Retirement Fund.

He said new revenue sources will be needed for an estimated $12 million supplemental budget for fiscal year 2014 to comply with the Fund settlement agreement, on top of the $123.4 million budget that he hopes the Legislature will pass soon.

The estimated revenue available for government operations in fiscal year 2013 was $114 million. Inos said that actual collections by the end of the fiscal year will be millions more than that.

Fiscal year 2013 runs from Oct. 1, 2012, to Sept. 30, 2013.

For fiscal year 2014—from Oct. 1, 2013, to Sept. 30, 2014—the projected revenue available for government operations is $123.4 million.

The Senate and House of Representatives have rejected each other’s versions of the 2014 budget bill a month before deadline. A six-member conference committee will meet for the first time tomorrow to hash out the budget differences between the House and Senate.

Rep. Tony Sablan (Ind-Saipan) said he is confident that the differences "could be settled in two days" so the House and Senate may be able to act on a "compromise" budget by the end of this week or early next week.

The fiscal year 2014 budget bill only provides for $20 million in government remittance to the Retirement Fund. The tentatively approved settlement agreement requires $25 million in remittance to the Fund in fiscal year 2014, as well as $7 million to $9 million in group health and life insurance plan funding from the government. This will be addressed in a supplemental budget.

However, there is still no telling how the government will be able to generate an additional $12 million because major revenue-generating bills are still in the Legislature. These include the electronic gaming bill and Saipan casino gambling bill.

At the Labor Day festivities yesterday, the governor said he would like to provide salary increases but the government cannot afford to do that this year because of the Retirement Fund and other obligations.

"But I want people to look at it in a positive way. I think the economy is improving. There will be a chance to really address that. Employees have been deprived of these annual increases and so forth and the prices of goods have come up so definitely we will continue to work toward that, achieving that level where we have some resources we can share with the employees," he said.

That can happen "a few years from now," he said, unless there’s going to be a "huge windfall" soon.

He said there have been increased revenues "but at this point any increase in resources will probably have to be dedicated over to the Retirement Fund."

Meanwhile, the governor said he has yet to receive any update from the Commonwealth Ports Authority board on its selection of Maryann Q. Lizama as CPA’s new executive director on Friday.

Lizama is CPA seaport manager but since Ed Guerrero vacated the top post of CPA executive director early this year, Lizama has been designated acting executive director. The post was advertised but the board couldn’t agree between two applicants, until they decided to appoint from within CPA instead.

The governor said yesterday that CPA needs stability in leadership "so we can keep moving; we are dealing with a lot of federal agencies and federal grants. This instability is not good."

Inos said he trusts that the CPA board deliberated on its decision.

When asked about the selection of Lizama, the governor said: "Maryann has been a very efficient administrator. She has run that organization in the absence of the [executive] director. So I’m pretty sure, she should do a good job."

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