CNMI CIP share cut •Funding will be realigned to Guam after CNMI failed to use them

Because of the failure of the Northern Marianas to use millions in infrastructure grants, President Bill Clinton has cut down 51 percent to $5.6 million next year’s funding for Capital Improvement Projects in the commonwealth.

Under the White House proposed budget for Fiscal 2000, the reduction in the annual appropriation of $11 million provided to CNMI under the Section 702 of the Covenant will be funneled to Guam to unburden it from the cost of hosting Micronesians.

This more than doubled the current level of capital improvement grants Washington extends to Guam from $4.6 million to $10 million, a move the US envisions to ease the financial impact spawned by the immigration of citizens from the Freely Associated States.

“The increase…is line with the estimated costs of the impact. This will be offset by a proposed slowdown in payment of capital funding to the Commonwealth of the Northern Marianas, where a large unused balance from previous constructions grants currently exists,” says a press release issued by the Office of Insular Affairs.

But in what appears to be an effort to appease the commonwealth, Washington said it increased to $2.6 million from $2.1 million the allocation for programs aimed to combat the spread of brown tree snakes. However, the increase will have to be shared with other US related islands threatened by the non-indigenous invasive species.

Overall, the Clinton administration said under the FY 2000 spending plan it submitted to Congress for approval, the appropriation for US territories rose $15.9 million to $301.8 million, or about 5 percent above the current level.

There is no immediate reaction from the Office of the Governor, but well-placed sources from the administration said Gov. Pedro P. Tenorio has been advised since last week that the US budget office would slash CIP grants to CNMI because of the latter’s failure to utilize millions of dollars in Covenant funds sitting in a New York bank.

The cutback in CIP grants to the island government is expected to draw the ire of local officials already angered by the White House’s insistence to take control of CNMI’s authority over immigration and minimum wage and non-payment of the compact-impact fees the US owes to the commonwealth for accommodating Micronesians.

Short of cash, the Northern Marianas has been seeking reimbursements from the federal government for money it spent for hosting FAS citizens, who, under the Compact of Free Association, are allowed unrestricted entry into US and its territories, including Guam and CNMI.

The agreement signed in 1986 stipulates that Washington will pay back host territories for sheltering citizens from FAS, Palau and the Marshalls.

Local officials are concerned that the unhampered entry of these nationals would further hurt the government’s coffers and infrastructure such as schools, hospitals, courts and other welfare services extended to nationals from these neighboring islands.

The proposed reduction in Covenant funds also undermines the efforts of the local government to use the federal grants under a seven-year master plan put together by the Governor’s Multi-Agency 702 CIP Task Force in December.

Under the plan, some $154 million worth of infrastructure projects will be carried out until the year 2005 which will include, among others, construction of new schools, harbor and airport upgrading, installation of power and distribution systems for homestead areas, road improvements, and construction of a new jail.

Dismayed by the failure of the previous administration to use the CIP funds, federal officials prodded the present leadership to come up with a master plan to enable them to use millions of dollars in grants that have been left idle in the Bank of New York.