I read in the local paper that the CNMI government is planning to impose yet another tax to help the CNMI Healthcare Corp. Oh for goodness sake! This is not the time to impose more taxes on our people who are already suffering. Over the last several years, our government has sufficiently demonstrated its inability to operate within its means and to find a way to get us out of our dire financial situation. Our leaders have to change their approach. Stop the taxing mentality and stop the imposition of more government actions that inflict more pain and suffering on our people. It is time to seriously look at what resources we have, and how we can use these means to help the CNMI recover from this economic catastrophe without relying entirely on casino gaming as the panacea for our financial problems.
We all know that the Retirement Fund is bankrupt, the CNMI Healthcare Corp. is broke, and our critical government agencies, including DPS, PSS, NMC, CUC, and other departments and agencies are experiencing serious budgetary shortfalls. Additionally, it is obvious that these agencies and departments are struggling to continue delivering even basic public services. To counter this failure in fiscal responsibility by our leaders, I suggest that our government be more serious in supporting businesses that are able to provide reasonable solutions to our ailing economy.
The CNMI must now be more creative and proactive in its efforts to generate new sources of revenues. An example in point is the Pagan pozzolan. JG Sablan Rock Quarry has a valid mining permit as provided for in Public Law 15-21. In late 2005, JGS found a U.S. investor who was committed to investing $5 million to get the operation going and in December 2005, JGS came current on all of its fees owed to MPLA. But then in May 2006, the Department of Public Lands declared JGS’ permit invalid and the new investor eventually pulled out. The matter has been in the courts ever since.
For certain, the Pagan project was delayed for far too long. But for DPL to pull the plug right after an investor has committed to get the project going, and after buyers for the pozzolan have been secured, is irresponsible and unfair. The administration continues to challenge the law and in doing so continues to prevent a decent and hardworking private sector business from generating desperately needed revenues for the CNMI. The latest episode in this ongoing conflict occurred last week when Judge David Wiseman presided over the case and his decision is forthcoming.
You may ask why is this administration perpetuating this battle of Pagan? It defies logic that our leaders continue to declare states of emergency for which the causes are primarily due to mismanagement and budgetary constraints while at the same time campaign against a legitimate revenue generating activity that could contribute much needed funds to our local coffers.
Almost a year ago, I invited a new U.S. investment group to replace the one that was lost after the permit was cancelled in 2006 to join forces with JGS in the extraction of pozzolan on Pagan. JGS, along with this new U.S. investment group, is ready, willing, and able to begin extraction and export activity at the soonest opportunity but instead is still waiting for the court to render its decision on the validity of its permit. If this long awaited project gets the green light, JGS plans to hire close to 100 local employees, spend over $15 million in the initial operations on Pagan, and will assist the Northern Islands community in their resettlement efforts. This project will pay huge amounts to the local treasury in the form of excise taxes, income taxes, government fees, and other regulatory charges. The project will also pay significant amounts for permit fees and royalties to DPL and MPLT. In addition, the pozzolan project will help make the Northern Islands a more active and contributing member of the CNMI political family.
Additionally, if the Pagan project does not proceed under the JGS' permit, it will likely never proceed at all. Part of the permitting process that JGS accomplished was to obtain all of the environmental and other regulatory permits needed. If JGS’ permit is ultimately lost, so will all of those other permits. A new investor will have to start the whole permitting process again from scratch and, because of changes in the law related to the environmental impact of such projects, it is highly unlikely that anyone will ever be able to get all of the needed environmental permits ever again.
I encourage our community leaders and policymakers to support JGS' permit for the extraction and export of the Pagan pozzolan. I further suggest that we pass a new law to earmark the revenues generated from the sales of pozzolan to cover specific obligations to include the following:
1. Retirement Fund: 20 percent of the revenue to cover government obligations;
2. Healthcare Corp.: 20 percent of the revenue for medical referrals and other hospital expenses;
3. Commonwealth Utilities Corp.: 20 percent of the revenue to cover PSS and NMC utilities and related expenses;
4. Scholarship: 20 percent of the revenue set aside for college scholarships; and,
5. Northern Islands Municipality: 20 percent of the remaining revenue should be allocated to the Northern Islands Municipality to cover costs of the Northern Islands resettlement plans.
We have the opportunity to dig ourselves out of debt but we need leaders with vision, not empty promises. JGS is ready to begin its pozzolan extraction project now and deserves more support from this administration rather than all the stonewalling it has received since this current leadership got into office. We cannot continue to suffer while our leaders think about imposing more taxes on our people. Further, we cannot allow DPL to unilaterally kill this revenue-generating project while the administration continues to declare more states of emergency.
I appeal to our government to dismiss and settle the ongoing challenge to P.L. 15-21 and to allow JGS to proceed with its pozzolan project. This project, as noted, offers the people of the Commonwealth a new source of revenue that will help offset the costs of vital public services. For the government to continue its legal challenge on JGS' permit will only prevent the people of the Commonwealth from realizing these additional sources of revenues. If this case is not settled and in the current litigious environment, the Pagan pozzolan project will be drowned in litigation for another two to three years. Further, as noted earlier, if JGS' permit dies in the courts now, no new permittee will be allowed to extract any amount of pozzolan from Pagan until all environmental and other regulatory permits are secured anew. Recent amendments to the federal Endangered Species Act, Clean Air & Water Act, Coral Reef Initiatives, and other related federal environmental laws and regulations will make it far more restrictive and prohibitive than in years past, thus making it more difficult for anyone to secure any new permits. Even if a new business were to take this Pagan project over now, it would have to start over from scratch, which means it would take about another three to four more years to get through the basic federal regulatory process with little or no guarantee of its success in addressing all the new requirements.
JGS has already secured all the necessary environmental and regulatory permits and is ready to proceed with the pozzolan project. All it needs now is for the government to dismiss the ongoing challenge regarding the constitutionality of P.L. 15-21 and for the administration to give its full support to the project. As stated before, if the government does this, the project will create tremendous job opportunities for the local people, expand local revenue base through increased taxes and royalties, support our export industry, and assist the Northern Islands Municipality in making their resettlement plans more safe and sustainable. Additionally, this action will make the CNMI's northern frontier a more active and participating member of the CNMI political family, and will assist the CNMI government in providing much needed help to the community.
In closing, I want to reach out to our elected leaders and ask that they unite in their efforts to find solutions to address critical issues facing the CNMI, and to ask them to revisit the very purpose for having a government in the first place. In this spirit, we must put the highest priority on our public health, public safety, and in the delivery of quality education of our young citizens. We must allow JGS to move forward with the pozzolan project so that the proceeds can be used to assist in offsetting the financial hardship that is plaguing the CNMI.
Thank you for allowing me the opportunity to share my thoughts on this important matter. I hope our leaders do not read this as just another political statement but as a recommendation from a concerned citizen on an alternative approach. I merely wish to remind us all of our valuable resource that remains untapped that could be part of the solution to addressing our economic woes. So please let us join hands and make it happen!
Edward DeLeon Guerrero