Teno unperturbed by plans to cut CIP grants

Posted on Jul 14 1999

Gov. Pedro P. Tenorio yesterday brushed aside a plan by the U.S. Congress to divert some $5.52 million out of the Capital Improvement Project funds that have been committed to the Northern Marianas, to the Virgin Islands for the next fiscal year.

He assured the move would not hamper efforts by his administration to tap millions of dollars in federal construction grants, saying the CNMI would still receive a total of $77 million from Washington under the CIP program between 1996 to 2002.

“We have a complete seven-year CIP plan and we are updating the plan as we go along. We will be using the federal funds as we find matching funds,” Tenorio told reporters.

The governor was reacting on the recent decision by both the Senate and House Appropriations Committee to reject a proposed 51 percent cut on the annual assistance provided by the federal government to the CNMI in favor of extending the grants period to 2003.

Washington has committed to appropriate $11 million to the CNMI each year beginning 1996 until 2002, but the funding for the last three years has largely been unused due to failure by the island government to match the grants dollar-for-dollar.

With the proposed deferment, however, the total U.S. obligations would still be fulfilled as stipulated under the Covenant 702 agreement since the $5.52 million funneled for the Virgin Islands will be earmarked by the Congress to the CNMI in FY 2003.

Both committees, which would submit its recommendations to the full body in the next few weeks, only agreed to reduce the amount from $11 million to $5.58 million for FY 2000 on the condition that the remaining balance will be allotted as part of the seven-year grant.

“Immediately, we will try to find matching funds as soon as we have it,” Tenorio explained. “We will put it out for the projects that need to be done.”

The island government so far has set aside about $103.2 million worth of CIP funds, including the sale of bonds by the Public School System and the recently-signed law allocating $24.2 million to various infrastructure projects such as the new prison on Saipan.

Tenorio likewise has pledged to support a proposal to float some $60 million worth of bonds, which is under review by the CNMI Legislature, to fast-track use of the federal grants.

The Commonwealth has been behind since 1995 in its spending of the yearly construction grants, unable to source matching funds, and the proposed funding cut had stemmed in large part from the significant backlog in previous year grants.

Island leaders have opposed the move initiated by the Clinton Administration, saying it would further push the CNMI into economic instability when its failure to make use of the multi-year grants has been a result of the worsening financial crisis besetting the government.

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