Saipan Tribune

Wednesday, June 19, 2013

Friday, September 28, 2012

MPLT: Release of $7M loan depends on passage of sin tax bill

The Marianas Public Land Trust will only release the $7-million line of credit it had approved for the Commonwealth Healthcare Corp. once the sin tax bill is passed, according to MPLT board chair Pedro Deleon Guerrero yesterday.

He said the bill would help the corporation meet its payment obligation but as to when and if this will happen, it will all be up to the Legislature.

Deleon Guerrero disclosed that bill is still being finalized and is expected to be endorsed soon by vice speaker Felicidad Ogumoro (Cov-Saipan).

Sin taxes are being proposed to be levied on commodities deemed dangerous to health such as alcohol, cigarettes, and food that promotes non-communicable diseases such as diabetes, obesity, and high blood pressure, among others.

It's been several months since the enactment of the bill that allows the $7-million line of credit for CHC but no single cent has been released yet-not without a measure that would bolster the paying ability of the corporation.

Despite these delays, Deleon Guerrero said the $7 million is not and will never be a “dead issue” for the MPLT.

“It's still pending, it's never a dead issue. MPLT has always been and still willing to help CHC. We drafted the sin tax bill to dedicate those taxes to the hospital for them to meet their payment obligation if and when we release the $7 million. We've been working with the administration and the Finance secretary and I believe vice speaker Ogumoro is ready at anytime to introduce this legislation,” Deleon Guerrero told Saipan Tribune during a break in yesterday's meeting.

He said they were made aware that both the Senate and House will entertain the bill.

Details as to what commodities will be taxed and the percentage of tax to be levied on these items are being reviewed at this time.

Deleon Guerrero admitted that because the process is still at the initial stage, MPLT cannot immediately say how soon the bill will be signed.

“Once it becomes law and it shows those revenues for CHC.we will go ahead and help the hospital as we committed,” he added.

Corporation board chair Joaquin Torres said yesterday that CHC fully supports the legislation and vowed to push for its immediate passage so they can drawdown the MPLT dollars. He said the sin tax idea will serve a dual purpose: assist the public hospital in its immediate needs while preventing the spread of non-communicable diseases caused by alcohol and cigarettes.

Torres described the hospital's daily operation as an ongoing challenge-without enough collection and revenue, payroll and obligation to vendors will not be met. The corporation was only allocated $5 million for its personnel and operation this fiscal year. It has over 400 employees and serves the public 24 hours.

Besides the $7-million line of credit, MPLT has already loaned out $3 million to the public hospital early this year. The amount is assigned a 7-percent interest rate, payable until March 2013. To date, only the loan's interest is being paid by the corporation.