CNMI asks for help to restore cut CIP funds

Confronted with the worst economic slump in years, local leaders yesterday made twin appeals to visiting US lawmakers to help the CNMI battle a federal takeover attempt and restore a $16.2 million cut in infrastructure grants.

Gov. Pedro P. Tenorio told congressional delegates, led by Rep. Don Young (R-Alaska), chairman of the House Resources Committee, the implementation of such proposals would be disastrous to the island economy, already in grim situation because of the Asian financial crisis.

“The economic impact of this loss will severely hurt us as we struggle to overcome our economic dilemma,” the governor said at the opening of the CNMI’s presentation of financial situation and labor and immigration reforms to committee members.

Tenorio had protested to Washington a plan that would decrease the FY 2000 infrastructure grants that CNMI receives under a seven-year financial assistance agreement with the US in fear such move may push the islands into economic instability.

The 51 percent cutback in funding for Capital Improvement Projects was contained in the next fiscal year’s spending package President Clinton has submitted to Congress.

The realignment of funds will benefit Guam whose appropriation for construction grants will increase to $10 million next fiscal year from the current level of $4.6 million to cover cost for hosting Micronesian citizens.

“We are surprised and dismayed that the Federal government has proposed to divert $16.2 million of our critically needed 702 infrastructure funds in the next three years,” Tenorio said.

According to Michael S. Sablan, the governor’s financial advisor on budget and finance, the immediate impact of the CIP cut on the local economy could be as high as $60 million.

Over the years, Sablan said, CNMI’s share of federal grants have paled in comparison to other insular areas, which are not required to come up with the dollar-for-dollar matching requirement.

Local officials have also expressed concern that the reduction in CIP funding would imperil key infrastructure projects they plan to implement under a seven-year plan, which was put together with the help of the US Army Corps of Engineers and the Office of Insular Affairs.

CNMI’s representative to Washington, Juan N. Babauta, offered a proposal in the form of amendment to Clinton’s proposed budget to allow the commonwealth keep the money.

Under his formula, Babauta said Congress could probably spread the years during which the Northern Marianas could avail of the grants to cover for the reduction in CIP fundings.

On the federal takeover threat, Tenorio sought the help of the committee members to assist the CNMI in reforming labor and immigration as reforms are underway to address concerns of Washington.

“Please help us do the job right, protect the intent of the Covenant, and preserve are form of government,” Tenorio said.

The Clinton administration has been pushing to put local minimum wage and immigration under federal authority because of the failure of the commonwealth to curb labor problems and restrict entry of guest workers, who now comprise 90 percent of the work force in the private sector.

But Young appeared to be cautious in throwing its full support to the Northern Marianas, saying “It’s the beginning of the discussion and once we get all the information, we’ll have time to talk to the governor and all other people directly involved and we’ll see.”