Pay cut last resort: Legislature

As Gov. Pedro P. Tenorio’s administration mulls over a possible pay cut for its 5,000-strong work force, some lawmakers yesterday called for thorough review of other government expenditures that can be reduced or eliminated in line with the current austerity policy.

While cautious on supporting the proposal broached in a recent meeting between Tenorio and members of the legislature, they said the drastic step must be taken as a last resort in dealing with the deepening financial crisis of the commonwealth government.

But legislators agreed other cost-cutting measures will have to be implemented immediately in view of the 13.4 percent decline in the revenue estimate, resulting in a $32.5 million shortfall for the current 1999 fiscal budget.

To shore up the depleting coffers, the legislature can pass laws that will increase government income, according to Senate Floor leader Pete P. Reyes as he noted the economic benefits of a proposed bill seeking to impose a cap on the foreign manpower of the local garment industry.

“Before we start cutting salaries, let’s try to pass laws that will raise revenues,” he said in an interview. “We should focus into the whole situation since the administration has not taken any action and everything remains a proposal.”

Reyes maintained at least $3 million to $11 million in fresh funds are expected to be generated from the legislation that some fear will allow additional hiring of 600 nonresident workers for the garment sector.

“We should do everything we can even if we have to do something locally that may piss off federal officials,” he said.

Senate Vice President Thomas P. Villagomez pointed out, however, that the plan to slash between five percent to 10 percent from the government payroll should be studied before any cut is imposed.

He said he would push for reduction in the salary of those receiving above $50,000 a year as well as removal of other benefits, such as housing, to spare rank and file employees from lower take-home pay.

“We would like to continue paying our government employees with the same amount of money because they can continue spending them back into our economy,” Villagomez said. “When revenues keep going down, what are we going to do?”

Rep. Malua T. Peter echoed the need to seek other ways to bring down government expenditures, calling for strict observance of travel ban for CNMI officials and hiring freeze in effect since January this year.

She said that leases on government cars and office buildings must be reviewed. “We have to look into those expenditures first before we cut our employees’ salary,” Peter added.

Rep. Melvin Faisao, whose proposed bill shaving an average of 25 percent from salaries of elected CNMI officials is pending in the House, acknowledged that they have to suffer the first wave of pay cut before any government personnel.

The Northern Marianas is reeling from its worst economic crisis in years in the aftermath of the currency crunch in Asia, its main source of investments and tourism revenues.

Due to the continuous drop in actual revenue collections, Tenorio last month pared down his spending level from $249.26 million to $216.75 million — a figure that will mean a 13.4 percent cut in appropriations allocated to all departments and agencies in the next 10 months.

But the shaky financial posture of the government has raised worries of further decline in the collections, while savings from on-going austerity measures are not sufficient to meet its operational costs.

Payroll of the nearly 5,000 civil service and contractual employees account for about 75 percent of some $189 million of the entire CNMI budget. The government is the largest single employer on the island.