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Gov’t may dip into rebate fund
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Posted on Mar 15 1999
Gov. Pedro P. Tenorio is planning to tap part of the money deposited in the special rebate trust account to raise some $5 million to $6 million for the payment of the Earned Income Credit which release have been held up since last year due to funding problem.
The governor said his financial advisers are seriously looking into the possibility of setting aside funds from the rebate trust account in order to facilitate the release of EIC.
“We’re reserving some money from the special account from the rebate money and we feel if we could use some of that money to pay for the Earned Income Credit, we would like to see that disbursed,” Tenorio said, as he appealed to taxpayers to be more patient because of the tight financial situation confronting the administration.
“This amount of money is a little hard to raise.”
Declining cash resources due to prolonged economic slump has delayed the release of EIC for tax year 1997, and taxpayers fear CNMI’s worsening financial condition would delay the mailing out of rebate checks for the last tax year.
The governor explained that aside from exploring options to come up with EIC funds, finance officials are considering a payment plan to disburse EIC either on a monthly or quarterly basis in order to reduce the Commonwealth’s financial obligation to taxpayers, as well as reduce its impact on the shrinking local coffers.
In 1998 taxpayers did not receive their rebate money until July due to a shortfall in the rebate trust account. In the past, checks for rebates, refund and EIC were released in lump sum during the month of May.
Money intended for rebates was believed to have been merged with general funds by the previous administration. When Tenorio assumed office, the trust account amounted only to over $2 million when it should been at $30 million.
A total of $28.07 million in rebates and refunds have been paid out by the Department of Finance for the last tax year to more than 42,000 individual and corporate taxpayers.
Over $20.45 million have been spent to pay back 42,780 individual filers and some $7.62 million for 51 corporate taxpayers. For tax year 1996, the government paid out an estimated $31 million for refunds and rebates.
