Opposition: ‘No deficit’ is a big lie

The political opposition in the House of Representatives expressed great disbelief over the Babauta administration’s claim that it will not incur a budget deficit this fiscal year, pointing out that the local economy is “in pretty bad shape.”

“Those are lies! Why keep publishing their lies? It’s very hard to believe their claim of ‘no deficit’ with JAL pulling out, the garment industry downsizing, and the CUC crisis. We have layoffs with the JAL pullout, costs of goods are rising, shipping cost is rising, everything is going up,” said Charles Reyes Jr., House leadership spokesman and Covenant Party advertising committee head.

“It just seems bizarre that the administration is claiming the economy is doing good. I don’t think their claim will stand up, given these factors. We are in a very, very bad economic situation,” Reyes added.

He was reacting to recent pronouncements of Finance Secretary Fermin M. Atalig and press secretary Peter A. Callaghan, who both said that, despite the major crises facing the garment industry and CUC, they do not see the government incurring a budget deficit this fiscal year.

They cited that the garment user fee collection, for instance, has so far become manageable. The government said it is collecting an average of about $2 million a month in garment user fee, following the worldwide lifting of trade quotas this year. It used to collect an average of $2.5 million a month in previous years.

Callaghan had also said that, if not for CUC’s financial crisis, the government would realize a surplus by the end of this fiscal year.

The government said that it has reprogrammed a total of $9.1 million to CUC following the May 19 disaster emergency declaration on utilities. The reprogrammed monies include $5.1 million in local funds, $1.3 million from the Marianas Public Lands Authority, and $2.7 million from federal funds.

Atalig said, though, that the government is getting revenues this year more than last year due to “more economic activities.”

He cited that as of July 2005, the government has collected $189 million in total revenues compared with July 2004’s $177 million, showing a $12 million increase. He said that for business gross revenue alone, the government collected some $53 million this year compared with last year’s $43 million.

“If you look at the figures, you’ll see that we’re getting more revenues, that the economy is moving—unlike what our detractors are saying,” Atalig had said.

The department also said that any overspending at this time would be “covered” by certain funds such as the Compact Impact funds of $5.1 million.

The June 2005 budget report showed that the government’s total expense reached $167.7 million while the revenues only totaled $154.2 million.

“It does not include funds such as Compact Impact funds, which goes to the local treasury,” said the department.