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Garment user fee slightly up in June
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Posted on Jul 21 2005
The garment user fee collection was slightly up in June at $2.1 million, government records showed.
In May and April, collections reached only $1.8 million each month—believed to be the lowest in several years.
The CNMI government used to get an average of $2.5 million a month or $30 million a year prior to the 2005 lifting of World Trade Organization quotas.
Records from the Department of Finance showed that user fee collection in January this year was $2.3 million; $2 million in February; $2.1 million in March; and $1.8 million each for April and May.
Finance deputy secretary Bob Schrack said that the figure is “pretty much” within the government projection of 20 percent decline in the garment user fee collection in view of the impact of trade quota lifting on local manufacturers.
“Right now it’s been running around 12 percent per month so the decline is less than what we have. But, of course, for the next [fiscal] year, who knows,” said Schrack. “If we collect $2 million a month, that would be good based on the projections.”
In February this year, the Saipan Garment Manufacturers Association reported a dramatic decline in garment sales by about 28 percent, which it said resulted in a substantial decrease by about $520,000 in government revenue from garment user fee.
The SGMA predicted that sales would drop by as much as 50 percent this year, which could mean a substantial decrease in user fees by up to $10 million.
The association had also projected that the government would lose about $35 million from the declining garment industry in fiscal year 2006.
As the CNMI’s largest industry, the garment sector claims to support about a third of the Commonwealth government revenue, while directly employing some 15,000 workers.
Recent statistics showed that the garment industry generated some 30 percent of the government’s revenue, or some $69.9 million.
