Revenue slips further •Tax revenue on retail goods falls along with tourist spending

Posted on Feb 08 1999

Gov. Pedro P. Tenorio has reasons to have restless nights. With revenue collections continue to slip, the fear of failing to meet government payroll is enough to give him sleepless nights.

Before signing a proclamation at his office last week, the governor admitted to married couples present during the rites that the deepening financial woes are a great source of worry for him than any of the problems confronting his administration.

Every pay period, the financially-troubled administration has to raise $5 million to $6 million to pay the salaries of more than 4,000 employees under government payroll.

“Sometimes I have restless nights. I couldn’t sleep, thinking whether we are going to meet the payday,” Tenorio said, as he explained to couples how tight the financial situation of the commonwealth is because of the economic slump.

The prolonged financial turmoil in Asia, where Saipan counts a haul of its tourists and fresh capital, has put the commonwealth in economic distress since 1997, pulling down revenues and forcing a big number of establishments out of business.

Latest revenue collections, according to officials, dropped during the first quarter of Fiscal 1999, but the governor’s financial advisor, Michael S. Sablan, said the decline was within 5 percent to 6 percent of the projections.

Excise taxes from perfume, cosmetics and leather goods – the favorite gift items purchased by tourists – decreased during the quarter due to a downtrend in tourism industry and changing buying habits of the once high-spending Japanese visitors.

Taxes generated from perfume sales plunged 39 percent from $91,000 to $56,000, while cosmetics dropped to $95,000 from $145,000, or 35 percent decline. Revenues from retail sales of leather goods slightly slid to $153,000 from $155,00 during the period.

“This is a reflection of a downturn in tourism this year versus last year…It is not only our tourist numbers declining but tourist spending per person is less,” Sablan said in a phone interview. “These are very consistent with our projections.”

Hotel occupancy tax took a $1 million dive from $2.2, or a 46 percent drop, compared to the same period last year.

Excise taxes from cigarettes are 44 percent below last year’s first quarter, according to Sablan, as a direct result of the last cigarette purchase of stores and not as an offshoot of the cigarette price increase implemented late last year after the multi-million tobacco settlement deal.

The administration has anticipated revenues to go south, adjusting 13.4 percent downward the current fiscal year’s spending level to $210 million.

A deep cost-cutting steps have been put in place to help the government meet its operations and avert possible disruption in providing critical services to the community.

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