Measures drawn to boost revenue

The Economic Recovery and Revitalization Task Force is drawing up a package of recommendation envisioned to help the cash-strapped government boost its local coffers in light of further decline in revenue collections officials are anticipating, according to Gov. Pedro P. Tenorio.

Tenorio said in an interview Friday that he has been meeting with members of the task force, mostly comprise of private sector representatives, to identify areas his administration can tap to shore up cash resources.

“We are meeting with members of the private sector and we are trying to come up with suggestions and recommendations as to what we can do to improve our resources for the succeeding fiscal years because our resources are depleting,” the governor said.

He, however, declined to say whether this will come in the form of new taxes or will mean deeper cuts in public spending.

The island economy has been in economic distress since a financial turmoil slammed into the mighty economies of Asia in 1997 where the Northern Marianas heavily relies for tourists and fresh capital.

Local officials are forecasting revenue collections to steady at $216 million in fiscal 2000 from current projections because of the prolonged region-wide economic recession, particularly in Japan, its main tourism market.

The government has previously said the economic situation in CNMI will hinge on how fast Japan, the second largest economy in the world, will bounce back amid growing doubts within the international community on the fiscal reforms Tokyo is implementing.

Because of this economic condition, commonwealth officials say they expect no real improvement in revenues to be generated for the next fiscal year.

The continuous drop in cash collections has forced the governor to adjust downward the spending package for FY 1999, slashing by 13.4 percent the annual appropriation to $210 million for the current fiscal year, and putting in place a wide-ranging cost-cutting steps to prune down government expenditures.

The decline in the half-a-billion-dollar tourism industry since late 1997 has substantially pulled down revenue collections, which peaked at $248 million during that fiscal year.

In FY 1998, the government recorded general fund revenues at $233 million, a decrease reflected by the significant drop in visitor entries to 1993 level. Airline landings during that period declined 36 percent to 27,135 from 45,457 the previous fiscal year, while hotel occupancy saw a dramatic fall from a high of 85.5 percent in 1997 to 58 percent.