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Revenue may steady next year
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Posted on Jan 29 1999
The Northern Marianas is projecting revenue collections to reach $216 million in fiscal 2000, the same level as the current fiscal year, as a result of the prolonged economic recession in Asia, according to the government.
CNMI is not expecting real improvement in revenues that will be coming in next year because of the slow pace of the Japanese recovery and decreasing confidence of the international community in the effectiveness of the fiscal reforms put in place by the Tokyo government.
In a position paper submitted to Washington, the local government said, “The substantial reduction in anticipated revenues is the direct result of the Asian currency crisis and recessions in many countries.”
Officials explained, “while the Japanese recession and related turmoil in other Asian economies is only an inconvenience to most American communities, these events have had a devastating effect on economic activity in the Commonwealth.”
The decline in the half-a-billion-dollar tourism industry since late 1997 has substantially pulled down revenue collections, which peaked at $248 million during that fiscal year.
In FY 1998, the government recorded general fund revenues at $233 million, a decrease reflected by the significant drop in visitor entries to 1993 level. Airline landings during that period declined 36 percent to 27,135 from 45,457 the previous fiscal year, while hotel occupancy saw a dramatic fall from a high of 85.5 percent in 1997 to 58 percent.
Because of the downtrend in the tourism industry, which accounts for the bulk of the economic activities in the Northern Marianas, the government said, “No real improvement is expected in fiscal year 2000.”
Because of an anticipated decline of 13.4 percent in cash collections, Gov. Pedro P. Tenorio had adjusted downward the spending package for the current fiscal year to $216 million from $249 million.
The governor previously warned that if the trend continues, he would be forced to further reduce budget allocation for all government agencies.
