Days after Vice Speaker Felicidad Ogumoro (Cov-Saipan) pre-filed a bill levying a “fat” tax of 5 percent on at least 30 food, drinks, and tobacco products she described as “unhealthy,” the Saipan Chamber of Commerce submitted formal comments opposing the bill and instead asks the Legislature to reduce its size and spending by 50 percent and divert those funds to the Commonwealth Healthcare Corp.
Ogumoro's House Bill 17-320 seeks to both combat obesity in the community and help the cash-strapped CHC repay its loans to the Marianas Public Land Trust.
Douglas Brennan, president of the largest business organization in the CNMI, also said the Chamber suggests that the Legislature look at the CNMI and federal governments “as logical candidates to bail out the Commonwealth Healthcare Corp., not the very businesses and consumers who are suffering as a result of those that have in part caused the problem.”
Brennan said the Chamber also questions the inclusion of peanut butter, chocolate, and soybean oil among the 30 commodities that the bill considers “unhealthy.”
“The SCC does not support H.B. 17-320 as written, and we offer that the 17th Northern Marianas Commonwealth Legislature reduce its size and expenditures by 50 percent and divert those funds to the Commonwealth Healthcare Corp. as a means to address any shortfall in providing essential public health care services the 'fat tax' intends to address,” Brennan said in an Oct. 25 letter to Ogumoro.
House Speaker Eli Cabrera (R-Saipan) has yet to call for a session and he has yet to assign the “fat” tax bill to proper committees.
Rep. Ray Basa (R-Saipan), chairman of the Ways and Means Committee, said yesterday that most likely, the bill will be assigned to his panel because it is a revenue-generating measure, unless the speaker decides to have the bill acted on right away.
Basa said he himself has reservations about the bill, saying the government should not increase any taxes during times of economic hardships. But at the same time, he said the hospital needs this income stream as part of its business plan that MPLT can use to decide whether to release the remainder of loans to CHC.
“It's not easy to decide on this bill,” Basa told Saipan Tribune.
As to the Chamber's suggestion for the Legislature to cut its size and spending by 50 percent, Basa said “everyone is entitled to their own opinion.”
Brennan, in his two-page letter to Ogumoro, said the Chamber is opposed to any further taxation on business activity in the CNMI, especially taxes that further increase the costs of goods and services where those costs are almost always passed onto CNMI consumers.
“Our economy suffers as a direct result of the increased costs of doing business in the CNMI. Sales for many Chamber members have declined sharply due to a smaller customer base,” the Chamber president said.
Brennan added that “increased operational costs in the CNMI are due in part to local government mismanagement and administration, as well as federal legislative initiatives that have led to the loss of 20,000 jobs.”
He said other factors, including “extremely expensive utility rates,” add to the burden.