DeLeon Guerrero urges Palacios to seek federal help to establish NMI paycheck protection plan

Senate President Edith E. DeLeon Guerrero (D-Saipan) introduced yesterday a resolution to request Gov. Arnold I. Palacios to ask the federal government for help in creating a CNMI-only Paycheck Protection Program to help businesses keep their workforce during the post-COVID-19 crisis economic recession.

“We need to find ways to help businesses stay afloat while the lack of sufficient flights/tourists is being navigated,” said DeLeon Guerrero in response to Saipan Tribune’s request for comments about her Senate Resolution 23-13.

She said the Paycheck Protection Program saves jobs and businesses. She noted that many businesses are still struggling and are far from their pre-pandemic levels. The lack of sufficient tourists and/or foot traffic to these businesses only aggravates the economic climate and when decisions to reduce hours or close shop happens, the reality is Business Gross Revenue Tax collection is affected as well, she said.

One way to assist businesses and their employees during this difficult time is to request for federal assistance to establish a CNMI-only PPP for a certain period of time, similar to the Small Business Administration’s PPP during the COVID-19 crisis, states DeLeon Guerrero’s Senate Resolution 23-13.

She said creating a CNMI-only PPP to help employers cover payroll costs including benefits and to pay interest on mortgages, rent, and utilities is necessary to ensure that CNMI businesses continue to operate and employ people.

DeLeon Guerrero said it is prudent to assist businesses before they shutter their doors and leave the CNMI.

With the issuance of the federal COVID-19 Public Health Emergency Declaration, then-CNMI governor Ralph DLG Torres issued an executive order to shut down the government, schools, and local businesses on March 16, 2020, to prevent the spread of the virus. Most businesses were closed for many months except for retail stores, distributors and pharmacies. The airports were closed, flights were cancelled, and residents and visitors were not able to enter and exit the CNMI for months.

As a result, DeLeon Guerrero said, the CNMI government furloughed over 700 of its 3,000-plus employees, only allowing essential government workers to work to protect the health, safety and welfare of people.

DeLeon Guerrero said the complete shutdown of the CNMI’s economy due to the COVID-19 pandemic nearly collapsed the CNMI government, its businesses, and the overall economy due to the drastic loss of revenue and income.

Between fiscal years 2020 and 2023, the CNMI budget dropped to between 48% and 51%.

Currently, DeLeon Guerrero said, the anticipated revenues for fiscal year 2024 are still 36.8% less than the fiscal year 2019 pre-pandemic level.

Fortunately, she said, federal appropriations, including the Coronavirus Aid, Relief, and Economic Security Act (2020), the Coronavirus Response and Consolidated Appropriations Act (2021), and the American Rescue Plan Act of 2021 provided desperately needed supplemental funds to address the shortfall in the CNMI’s budget revenues, as well as financial assistance for employees, employers, and the CNMI public during the pandemic.

Financial assistance included the PPP established by the CARES Act, which was implemented by the Small Business Administration with support from the Department of the U.S. Treasury.

DeLeon Guererro said this program gave small businesses funds to pay up to eight weeks of payroll costs, including benefits. The funds were also used to pay interest on mortgages, rent, and utilities.

The PPP prioritized the workforce employed by small businesses by authorizing federal funds toward job retention and certain other expenses.

Currently, DeLeon Guerrero said, the CNMI’s economy continues to be in a deep recession and may not recover until the main economic industry—tourism—fully resumes.

With no other industry present to support employment, commercial activity, and government revenues, the imminent collapse of the tourism industry will have repercussions for the future of the CNMI that will last for years, she said.

The Senate president underscored the need for the CNMI to act now to prevent more businesses from shuttering their doors due to the lack of visitors and business activities.

She noted that some businesses have begun to reduce their workforce by laying off employees as a result of low revenue collection and slow business activities.

Edith E. DeLeon Guerrero