Government expenditures climb 9%

Following an increase in the amount of taxes and fees collected by the CNMI government in the third quarter of the financial year 2000, its expenditures for same period rose by nine percent to $57 million from the previous quarter’s $52.3 million.

A report from the Department of Commerce which quotes official figures from the finance department disclosed overall amount of taxes and fees collected in the same period climbed by near-nine percent to $55.53 million from $51 million in the second quarter of FY2000.

However, the government’s spending level under the administration of Gov. Pedro P. Tenorio is still relatively lower than the average quarterly cost incurred by the previous regime which amounted to about $67 million in 1997.

Strict compliance with the self-imposed austerity measures allowed the government to cut its spending by more than 15 percent compared with the previous administration’s quarterly appropriation, representing over $10 million in total savings per three-month period.

Intensified cost-cutting steps and tighter monitoring of unnecessary spending were the major factors that helped the administration slash government expenditures from $67 million in FY1997.

Mr. Tenorio’s efforts to maintain government spending within the available revenues by putting emphasis on the more important services and programs also pulled down the average quarterly allotment during FY 2000 versus the previous financial year.

Average quarterly allotment during the current fiscal year, based on the DOF figures quoted in the commerce department’s report on economic indicators, is about $54 million, lower from the FY 1999’s $55.075 million.

This fiscal year’s quarterly spending was even lower than the level during the financial year 1996 when the CNMI government was spending an average of $55.4 million per three-month period.

In 1998, the average quarterly expenditures of the Commonwealth government amount $63.9 million, lower than the FY 1997’s average allotment of over $67 million.

In FY 1999, the Tenorio Administration managed to slash its expenses by more than $35 million, spending only $220.3 million, lower from the previous year’s $255.6 million.

Government officials said the quality of the delivery of basic social and public services did not suffer despite the drastic cut in expenditures since the austerity measures were primarily focused on non-essential spending.

A big slice of the savings went to a program aimed at eliminating the cumulative budget deficit, which the current leadership inherited from the previous administration.

The $80.6 million budget deficit was down to $70.7 million by end of Fiscal Year 1999. Government officials attribute the landmark reduction to drastic austerity measures instituted by the Tenorio Administration.

The year 2000 was also the first time government revenues inched up since visitor arrivals began dipping in 1997, with collection in key duty areas like hotel occupancy, excise, and bar & jackpot taxes showing strong improvements.

Sans stringent cost-cutting steps which were established by the Tenorio Administration, the deficit could have ballooned $133.4 million in FY 1998.

The governor’s finance managers are looking at a three-pronged approach that would assist the government in reducing the cumulative budget deficit — elimination of wasteful spending, economic revitalization efforts, and passing economic development legislation.

Finance officials said funding problems faced by the Commonwealth, especially on government agencies responsible in the delivery of essential services, is associated with the existing budget inadequacy.