Helping PSS at the expense of healthcare, social services

In January 2004, the Department of Public Health headed by Dr. James U. Hofschneider requested approximately $2.4 million of the Compact Impact funds, or CIF, that the CNMI was supposed to receive from the federal government. In March 2004, Dr. Hofschneider told the media that DPH needed $3 million to upgrade the water system, including medical grade, potable water, rainwater catchments, fire suppression and waste; and another $3 million for ventilation and space cooling. A grand total of $6 million would be necessary to sufficiently take care of the urgent needs of DPH.

Approximately 12 months after the request by Dr. Hofschneider was made, Gov. Juan N. Babauta told the island community in January 2005 that he wants to commit $20 million of CIF to the Public School System over the next four years, i.e., $5 million a year.

In February 2005 and approximately one month following Babauta’s announcement to commit the CIF to the PSS, Finance Secretary Fermin Atalig told the media that the CIF funds had not yet arrived for 2004.

On March 1, 2005, David Cohen, Deputy Assistant Secretary of the Interior, announced that the CNMI would receive a CIF grant for approximately $5.1 million to offset the costs to provide health care, education, and social services to those permitted to migrate to the CNMI under the Compacts of Free Association. Presumably, this funding will be allocated to the CNMI sometime during 2005.

Since the commitment of CIF to PSS made by Babauta in December 2004 would essentially “use up” all of the $5.1 million that Cohen announced will be allocated to the CNMI, then where will the funds come from to take care of the health care and social services mentioned by Cohen when he announced the grant? If the CIF is supposed to offset the costs of three areas (health care, education, and social services), then it is apparent that the governor has decided to not use the funds equitably to provide resources for all of the abovementioned areas.

For Gov. Babauta to publicly commit all of the CIF funding to K-12 education and neglect the fiduciary responsibility of taking care of health care and social services might elicit some negative fiscal ramifications, as well as being problematic down the line for those island residents who are seeking and in desperate need of adequate health care and social services.

Over the past three years, Babauta has tried to mimic George W. Bush’s “No Child Left Behind” program regarding K-12 education. His commitment of the $5.1 in CIF will no doubt take care of some much needed buses, books, and educational technology for the children of the island community if all of the funds happen to make their way to the education board and Dr. Inos. Unfortunately, this commitment was made at the expense of other critical areas that should not be neglected.

However, Babauta has literally dropped the ball and has failed miserably in the area of higher education. He allocated approximately $4.6 million for NMC from the Jobs and Growth Tax Reconciliation Act of 2003 to purchase the La Fiesta Mall complex and establish a long-term lease. Notwithstanding the fact he bailed out NMC in late 2004 by taking the responsibility and obligation to pay the $50,000 monthly expenses for the mall, as well as $250,000 for the 20-year note regarding the lease, the only thing positive from this decision by the Babauta administration was that NMC did not lose its required accreditation with WASC. The accreditation would have not been in jeopardy in the first place had the BOR decided to not go with the decision to embark on a La Fiesta project that “failed” before it even commenced.

In terms of importance, there should not be any significant difference between education, health care, and social services. They should all be considered significant and on the same plane fiscally and should never be shortchanged and neglected. Had Babauta taken the $4.6 million and divvied up the funds to take care NMC, PSS, as well as much needed health care and social services, then he could argue that his track record for taking care of these areas is a solid one. But since this is not the case, then his track record leaves something to be desired.

Gov. Babauta has clearly demonstrated where his priorities are and the areas that he is flat out not supporting financially. While he clearly does not want to leave a child behind in the CNMI, he is without a doubt leaving behind the residents who desperately need health care and social services with his decision to allocate “all” of the CIF to the PSS.

So if we go back in time and took the $4.6 million squandered on the failed La Fiesta project and tack it onto the $5.1 million CIF that will be allocated to the CNMI, you have a grand total of $9.7 million that could have been utilized for NMC, PSS, DPH, and the social services for the 75,000-plus island residents in the CNMI. Unfortunately, we are all cognizant of where the money has gone to.

In December 2004, Gov. Babauta told the media that he “foresees improved economic conditions in 2005, citing an additional $20 million in revenues at the end of the current fiscal year.” During the same time, Finance Secretary Fermin Atalig asserted that General Fund revenues for the first two months of the current fiscal year, i.e., October and November, totaled $34.8 million, about 19 percent higher than the $29.3 million during the same period in the previous fiscal year. Atalig went on to say that taxes compared to the previous fiscal year are up by “$3 million” and total fees, services, and other revenues increased about $2 million within the first two months of the current fiscal year.

When Heinz Hofschneider was the Speaker of the House for the 13th Legislature, he told the media that about $1 million per pay period should be remitted to the Retirement Fund to keep it current and not in arrears. Hofschneider indicated that only “$500,000” was being doled out and there has never been enough resources to pay the amount to keep it out of the red.

The question that needs to be posed by the electorate to the Babauta administration is: If things have been getting better and the revenues are up in the areas the finance secretary indicated, then why hasn’t there been any consistency with paying the Retirement Fund adequately every pay period? And if the revenues are “in fact” up like Babauta and Atalig professes, then there should not be any difficulty in bringing the Retirement up to current status and out of the red, as well as paying other vendors and organizations still waiting for funds from the government.

Part of the leadership role of a governor is fiscal responsibility and ensuring that government resources are being utilized judiciously. Anything that deviates from this will be a disservice to the island community members who rely on the government to help them with maintaining a decent quality of life in the CNMI.

Since the governor was elected by the populace of the island community, he has an obligation to make prudent decisions with public funds that will meet the needs of “all” the residents in the CNMI and not to appease a “select few.” If the governor does not feel that meeting the needs responsibly of all the residents is important and/or necessary, then he should not be surprised if the results of the election in November 2005 are much different from what he projects and expects it to be.

Dr. Jesus D. Camacho
Delano, California