Legislators back OPA’s cost-cutting measures

While acknowledging the need for tougher measures aimed at reducing government spending, legislators appeared overwhelmed by a recommendation from the public auditor that will cost at least $23 million in savings this fiscal year.

Two members of the CNMI Legislature yesterday offered ways that will help boost the shrinking coffers amid continuous drop in revenue collections and declining spending level of the government.

Senate President Paul A. Manglona said the Tenorio administration is dealing with the anticipated budget shortfall by implementing several cost-cutting plans that have resulted in substantial savings in recent months.

“The governor has addressed most of the concerns of the public auditor with his austerity measures, such as hiring freeze,” he told in an interview.

“If the plan is closely adhered to, we will do fine. It is painful and it’s hard that these actions have to be taken but it is something that we really need to do,” Manglona said.

The lawmaker was reacting to a recommendation sought by a member of the House of Representatives from the Office of Public Auditor to cut back on government expenditures in light of the falling revenues.

OPA chief Leo L. LaMotte has identified more than $23 million in unessential appropriations under FY 1999 budget package that have to be cut or pared down to bail out the cash-strapped government from possible bankruptcy.

The recommendations included strict adherence to employment ban in the government, deferment of salary raise, restricted official travels as well as privatization of some departmental functions to make them more efficient and cost-saving.

Although he agreed with the need for strict monitoring of the ongoing austerity efforts, Rep. Karl T. Reyes said reduction in work hours of the nearly 5,000 government employees will yield huge savings, on top of a decision against filling up vacant full time positions.

At least $6 million is anticipated to be saved from the proposal this year, according to the chair of the powerful House Ways and Means Committee.

At close to $190 million in allotment for this year, payroll constitutes 75 percent of the entire budget. The government is the biggest single employer on the island.

“It is possible not to hire FTE’s,” Reyes explained. “That’s one way of pushing employees to perform better within the limited staff. If we do that, we can save a lot.”

He maintained that cut down on travel expenses and official representation, as proposed by LaMotte, will also help the administration to prioritize essential services of the government.

“If you save half of that, you can really help out the Public School System or the Northern Marianas College or the hospital. Anything you can save can go to another program,” Reyes said.

Departments and agencies, including PSS, are facing deep budget cuts in the wake of the worsening economic crisis on the island that has pulled down revenue collections and forced Tenorio to slash the $249.26 million budget by 13.4 percent.

Manglona echoed the concerns of CNMI leaders to seek ways that will revitalize and stir the local economy, whose main source of income — tourism — has teetered amid the collapse of most Asian economies.

“Rather than dwelling on these tough measures, the governor and the legislature are working together to look at other areas to increase our revenues,” he said. “That’s the other side of equation that we really have to concentrate.”