‘2024 brings great promise’
With more federal and local dollars expected to boost the CNMI’s coffers and continued efforts to revive the tourism industry, Gov. Arnold I. Palacios is optimistic that things are looking good for the Commonwealth in 2024.
In his Fiscal Year 2023 Annual Report submitted to the Legislature on Monday, Palacios disclosed that the Tax Collection Task Force he created last July has been executing installment agreements and recovering approximately $8 million.
Also, his administration expects more than $24 million in disaster-related reimbursements from the Federal Emergency Management Agency in the coming months. Palacios said this will be key in reducing the government’s outstanding deficit and facilitating payments that are owed vendors.
As for key infrastructure projects slated for 2024, Palacios said the $15-million revolving line of credit from the Marianas Public Land Trust, as authorized by the Legislature in Public Law 23-12, will be critical.
On top of that, with ongoing efforts to revive and expand the tourism industry and open new markets, the Marianas Visitors Authority projects a 36% increase in overall visitor arrivals in fiscal year 2024 compared to fiscal year 2023.
Palacios said they are hopeful that revenue-generating bills now making their way through the Legislature will be passed and sent to his desk for approval this year, providing additional, much-needed fiscal stability for critical operations and services.
“Though not without challenges, the new year brings great promise for the Commonwealth, and we have much to look forward to,” Palacios said.
The governor said that they made significant strides in fiscal year 2023 in improving government collections through the efforts of the Tax Collection Task Force. Since launching the task force in July 2023, the Department of Finance has brought 226 taxpayers into compliance and raked in $8 million additional taxes. The task force is mandated to aggressively collect taxes owed in the past 10 years.
Palacios said the task force’s efforts will continue in fiscal year 2024, and that they expect further improvements in taxpayer compliance and government collections in the months ahead.
In July 2023, Finance Secretary Tracy B. Babauta disclosed to the Senate Fiscal Affairs Committee that Finance has $121.4 million in total outstanding collectibles from the past 10 years, including $30 million in employee quarterly withholdings that were not remitted by employers.
In addition to continuing improvement in government collections and increased tourism arrivals, Palacios said they look forward to the economic stimulus and infusion of new revenue that federally funded projects will bring in the new year.
This includes new construction, road projects, expanded internet access, and climate action initiatives made possible through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
Anticipating continued improvements in tourism arrivals, Palacios said that, according to MVA, the Commonwealth expects a 35% growth in arrivals from CNMI’s top market, Korea, in fiscal year 2024, compared to fiscal year 2023’s 214,553 visitors.
He said they also expect an estimated 11,000 visitors from Japan in fiscal year 2024—a 49% increase compared to fiscal year 2023.
The governor said they also anticipate direct flights from Hong Kong to Saipan to begin in early 2024, and project an estimated 14,336 visitors from that market.
The CNMI ended fiscal year 2023 with an estimated $4.1 million deficit, arising from a revenue shortfall of $313,310 and over-expenditure amounting to $3.8 million.
Gov. Arnold I. Palacios
