The island community deserves better

The Bank of Hawaii Economic Report for 2003 revealed that the overall deficit for the CNMI government recorded in FY 2000 was $69.5 million; $87.9 million in FY 2001; and, $99.5 million in FY 2002.

The recent audit released by Deloitte, Touche & Tomatsu revealed the total deficit for the CNMI at the end of FY 2003 on Sept. 30, 2003 was approximately $118.4 million. So in one fiscal year, the deficit increased nearly $19 million under the gubernatorial leadership of Juan N. Babauta.

Since audit reports have not been conducted for FY 2004 and FY 2005, the island community will not know exactly just how much Babauta is responsible for in increasing the overall government deficit. If the deficits for FY 2004 and FY 2005 are close to what was generated in FY 2003, then the deficit could very well be in the neighborhood of $150 million.

If audit reports conducted in the near future on fiscal years 2004 and 2005 should show that the deficit increased from just under $100 million to $150 million, then the percentage increase would be in the vicinity of 51 percent for three fiscal years under the gubernatorial leadership of Babauta. If this is the case, then Babauta will have the dubious distinction of running up the government deficit more than any administration since the inception of the Commonwealth.

The negative consequence of having a gargantuan deficit is akin to running up a credit card to the maximum level with monthly interest rates of 20 percent. If your income is not substantial, then trying to make principal and interest payments concomitantly will be an extremely difficult task. Since the payments will not make a significant dent in the principal, it will take a considerable amount of time to pay off the overall debt.

At the present time the Commonwealth is cash-strapped and having a difficult time paying what is owed due to the fiscal mismanagement of the incumbent governor. Not being able to take care of the financial obligations consistently will place the government in a bigger and deeper hole that will add to and not pare down the deficit.

The pertinent question that must be posed for the electorate is: How can you pare down a mounting government deficit when you have an outstanding debt to the Retirement Fund of around $84 million; $4.4 million to CUC; and $1.5 million to PSS and you continually have more expenditures than are collected in revenues? The answer is simple: You can’t.

It is evident that the fiscal picture in the CNMI “is not pretty darn good.” Because the island community cannot afford to allow the failed leadership of the incumbent governor to continually let the economically crippling deficit mount uncontrollably and contribute to the deterioration of the economic stability of the island community, it will be necessary to go to the polls in November 2005 and elect a leader who comprehends what the real meaning of fiduciary responsibility is and exercises it to remove the government from this serious and precarious economic dilemma to enable the island community to have a brighter and more stable economic future.

Dr. Jesus D. Camacho
Delano, California