More spending cuts needed for CNMI government to survive

As authorities investigate the alleged swindle of millions in federal dollars during the Torres administration, the Commonwealth economy and government are approaching what some government officials have coined a “fiscal cliff.” More hours may be cut from public workers’ workweek, the 25 percent supplemental payment to retirees may be nixed, and changes to the government’s group health and life insurance plan may be made.

These proposed austerity measures were discussed in an emergency meeting among executive and legislative branch leaders late Friday. Today, the heads of the two branches confirmed the fiscal crisis, but did not disclose the options for cost savings they are mulling with the Department of Finance.

According to a joint news release from Arnold Palacios, David Apatang, Edith Deleon Guerrero, and Edmund Villagomez, “the Commonwealth’s revenue forecast for FY 2024 will need to be revised downward, prompting the revaluation of financial priorities and modification to expenditures. DOF will continue to track revenue collections to determine to what extent the current budget will need to be adjusted.”

“We are committed to working together to ensure that essential services are not disrupted, ensure both legislative houses address fiscal legislation in conference committee, ensure fiscal transparency, and closely monitor revenue updates while we collectively and actively navigate through the difficult decisions for our Commonwealth’s long-term stability and prosperity,” Ms. Deleon Guerrero, the Senate president, said in the news release.

The cause of the sudden downward spike in revenues is a decline in the imports of general commodities and “high tax-value items” such as cigarettes and alcohol. Reported increases in tourism spending are not yet enough to offset decreased revenues from excise and business gross receipts taxes, according to the joint news release.

“While it’s not easy to share this news, I believe we must confront our challenges openly and work together to find solutions,” Governor Palacios said. “In light of these economic realities, I want to emphasize the importance of fiscal responsibility and prudence in managing our Commonwealth’s finances. Nonetheless, in confronting fiscal challenges, we must approach them with compassion, especially when considering how the most vulnerable in our community will be affected.”

“We will be looking at immediate, time-sensitive measures that will impact the current budget, and we will also be evaluating the FY2025 budget and other legislative initiatives that can help stimulate growth and provide vital support,” Mr. Villagomez, the House speaker, said.

The House has passed a series of revenue enhancements through fee and tax levies and increases. Those measures await Senate approval.

“I understand that some of the measures may involve sacrifices and adjustments for many individuals and agencies,” Mr. Palacios said. “However, I believe that by working together and making informed decisions now, we can lay the foundation for a stronger and more sustainable economic future. We have overcome challenges before, and I do not doubt that we will emerge from this period of uncertainty with renewed determination and optimism.”


  • Sadong Tasi Resident

      03/18/2024 at 7:59 AM

    The CNMI government is the largest employer in the, well … CNMI with just under 2,000 on the payroll.

    They are honestly surprised people are spending less after crane kicking the largest part of the tax base in the face?

    If people make less, they spend less. Economics 101 … and I didn’t even go to college.

  • It’s fascinaing to watch our fear-based, egoic, government posing as a “huddled mass, yearning to breathe free.”

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