Gov't effects 13.4% cut for second quarter

To deal with the projected decline in revenue collections, the financially-troubled government has begun implementing a 13.4 percent cut in the second quarter allotment to departments and agencies, but lowered the budget slash for the Public School System to help it cope with the growing needs of the education sector.

While the rest of the agencies received a uniform reduction in the quarterly advise, allocation for PSS was chopped by 9 percent to avert a potential disruption in its operations.

The reduced spending level for each department and agency took effect beginning January in line with the revised revenue estimates for Fiscal Year 1999. In the past, all government offices received 25 percent of their total budget every quarter.

Because of the economic slump that has substantially pulled down revenue collections, Gov. Pedro P. Tenorio unveiled in November a new spending package for the current fiscal year at $210 million, $32.5 million lower than original projections.

Tenorio explained that the bulk of the decline in collections will come from NMTIT, business gross revenue, liquid fuel, hotel occupancy, bar and general excise taxes as a result of a slowdown of business activities in the Northern Marianas.

The new spending level is part of a package of measures the administration has put in place to deal with the economic crisis dogging the CNMI since middle of last year when a currency crunch struck Asia, once home to some of the fastest growing economies in the world. Japan and South Korea, two of the region’s economic giants hardest hit by the financial fallout, used to be the commonwealth’s key providers of tourists and investments.

In a memorandum issued by acting Special Assistant for Management and Budget Virginia Villagomez, several requests to release advance allotments from 25 percent to 100 percent of the budgeted line item have been turned down in view of the 13.4 percent budget cuts.

“We ask that you carefully analyze your request before resubmitting it to us,” Villagomez advised all department and activity heads, “The Governor will consider emergency allotments on a case-by-case basis. It is certainly not his intent that essential services be disrupted.”