The good news is that the CNMI government collected $2.569 million more than the $114.32 million in revenues it projected for fiscal year 2013, buoyed by a steady increase in tourist arrivals. The bad news is that total spending exceeded appropriations by $3.761 million, mainly because of utility charges, medical referrals, and public safety costs.
“The effect of both revenues and expenditures produced a net deficit of $1,366,369 for the fiscal year,” Gov. Eloy S. Inos said in his Dec. 31 annual financial report for fiscal year 2013 to the Legislature, a copy of which was obtained yesterday.
Fiscal year 2013 is from Oct. 1, 2012, to Sept. 30, 2013.
If it’s any consolation, the net deficit of $1.366 million in fiscal 2013 is far below the annual figures recorded in recent years.
For example, in fiscal 2011 under the Fitial administration, the net deficit was $25.8 million. In fiscal 2010, the net deficit was $18.586 million.
Inos, marking his 11th month as governor, said the CNMI “continues to show signs of recovery, as evidenced by the increases in business gross receipts.”
The governor asked for the Legislature’s continued assistance and support “as we continue to provide essential government services despite severely limited resources.”
Lawmakers, as of yesterday, have yet to review the governor’s report.
While the government’s actual revenues were more than it projected, the difference was no match for the government’s growing obligations.
For example, the government has to come up with at least $19 million to cover a shortfall in obligations to the Retirement Fund settlement account and health and life insurance.
Moreover, the fiscal year 2014 budget of $123 million is still among the lowest in a 25-year period in the CNMI.
Delegate Gregorio Kilili C. Sablan (Ind-MP), meanwhile, inserted in a U.S. Senate committee-approved bill, S. 1237, a provision that helps U.S. territories such as the CNMI improve their annual revenue estimates to avoid incurring deficits.
The governor, in his financial report, said revenue collections and other financing sources recorded for the year—excluding those reserved for debt service and “transfers out”—totaled over $137.233 million or $5.184 million more than projected.
Business gross revenue tax showed a $2.2 million over-projection or 1.86 million over the previous year. Actual BGR in fiscal 2013 was $59.4 million, compared to the estimate of $57.2 million.
Wage and salary taxes, however, fell by $4.176 million—from an estimate of $25.5 million to actual revenue of $21,323 million.
Personal income tax collection also fell by $2.889 million, while corporate income taxes increased by $1.256 million.
“Overall collection of income taxes in the Commonwealth totaled $90,243,023 with strong collections in the BGRT category, reducing the impact of the shortfalls in this revenue category to $3,256,977. Favorable collections are reported in all other tax categories,” the governor told the Legislature.
The CNMI also exceeded its excise tax projections by 27 percent, collecting a total of over $21.323 million. This resulted in a surplus of over $4.523 million.
Hotel occupancy taxes also showed a significant increase with collection of over $8.519 million, which was $3.049 million more than anticipated.
License and fee collections totaled over $7.242 million, which was $177,335 less than projected.
Charges for services and other revenue also fell short of projections by $238,584 with a total collection of $2.45 million.
Other revenue collections of $899,125 also fell short of projections by $109,875.
Total expenditures and obligations for fiscal 2013 exceeded total appropriations and allotments by $3.935 million.
The budget allotment was over $113.876 million but actual spending was more than $117.812 million.
Total personnel spending reflects a surplus in budget allotments by over $1.129 million, while total expenditures and obligations under “all others” category exceeded appropriations by over $5.065 million, resulting in a net overexpenditure/overobligation of over $3.935 million.
“The majority of the overexpenditure for the fiscal year is attributed to excessive prior year and current year utility charges, unbudgeted costs for Medical Referral, and overexpenditure in operations for the Department of Public Safety,” Inos told lawmakers.
For utility costs alone, the budget allotment was over $6.061 million but actual budgetary basis was over $9.838 million.