Benavente says lost Labor revenue won’t justify suit

The millions of dollars that the CNMI’s government could lose if the pending federal takeover of local regulations for foreign workers forces the Department of Labor to close is insufficient justification for Gov. Benigno Fitial’s plan to file suit against federal authorities in a bid to block it, Rep. Diego Benavente (R-Saipan) said Tuesday.

In an interview, Benevente, chairman of the House Committee on Federal and Foreign Relations, responded to estimates detailed in a Sept. 8 letter sent him by Deputy Labor Secretary Cinta Kaipat suggesting the so-called “federalization” of local immigration could cost the CNMI’s government up to $4.4 million each year in revenues.

“I don’t dispute that there will be some revenue loss once federalization kicks in,” Benevente said. “My concern is that the original letter [sent by the Department of Labor] talked about the loss but conveniently left out the other half of the story. The information we’re getting now continues to be propaganda to get us to support the lawsuit.”

Fitial in a statement earlier this year said he is poised to file suit against the federal government over “federalization,” which many local business leaders have said threatens to damage the local economy.

Labor’s potential revenue losses, Benevente added, are “a very good point, but I don’t think it’s enough to justify a lawsuit against the U.S. government. Unless we can argue on the authority of the federal government to take over our labor and immigration, then we don’t have a justification to sue.”

Kaipat in the letter said that federal authority over local labor rules could force her department to close, thereby cutting back yearly government spending by $1.7 million. However, she noted that Labor can generate up to an estimated $6.1 million in revenue each year for the government, meaning federalization would ultimately cost the CNMI up to $4.4 million annually.

The federal takeover would not involve the section of Labor that deals with employment services for U.S. citizens and permanent residents, she added, so at least part of Labor’s budget cannot be included in these estimates.

Kaipat’s letter comes only days after one she sent to members of the CNMI Legislature Sept. 2 detailing the potential fallout in terms of lost revenues from the Labor Department that federalization could cause.

“Over five years, we will lose approximately $20 million in revenues that would otherwise be used for Commonwealth public services,” she wrote. “We will lose these funds at a time when we need revenues to help the Commonwealth recover from the economic depression that we have been suffering over the past three years.”