Compact formula: Just 6 percent of $30 million for CNMI

The population of Freely Associated States citizens in the CNMI represents only 6 percent of the total estimated FAS population here and in Guam, Hawaii and American Samoa. This means the CNMI will only get 6 percent or a little over $1.93 million of the total $30 million in Compact Impact funding appropriated by the U.S. Department of the Interior to the four jurisdictions every year.

However, the proposed Compact Impact funding of $1.93 million does not factor in yet the authorized deduction of up to $300,000 to carry out the cost of conducting a census.

This was explained to House Ways and Means Committee chair Rep. Ray N. Yumul by Delegate Gregorio “Kilili” C. Sablan in response to their question about Interior’s calculation of Compact Impact funding for the CNMI.

Under President Obama’s Fiscal Year 2010 budget proposal of $3.4 trillion to the U.S. Congress, the CNMI will be getting only $1.93 million in Compact Impact funding, an over 62 percent drop from the previous funding of $5.172 million.

Sablan, in a letter to Yumul, said losing money may be difficult but the change comes at a time when tens of millions of dollars from the American Recovery and Reinvestment Act are on their way to help smooth the transition and aid in creating innovative cost-cutting measures that may result in greater savings in the future.

He also said a large amount of administrative monies—indirect costs that conceivably could be as much $15 million—connected with the ARRA funds will soon be available.

“And a drop in the number of FAS citizens does mean less cost to the NMI government as well, as fewer services have to be provided,” Sablan told Yumul.

Yumul, in a memorandum to House Speaker Arnold I. Palacios, provided Sablan’s explanation regarding the calculation of the CNMI’s Compact Impact funding for FY 2010.

“As reported in the DOI’s FY 2010 budget justification, they have not deducted $300,000 for the costs to enumerate and track [FAS] migrants from the $30 million,” Yumul told Palacios.

The House leadership tasked Yumul to seek explanation on the CNMI’s proposed Compact Impact funding for FY 2010 the same day the figures were reported in the Saipan Tribune.

Yumul, in an interview, said he is concerned that the margin of error in the estimate of FAS migrants is 90 percent.

“That’s a huge margin of error,” he said.

Sablan, in his letter to Yumul, said the U.S. Census Bureau used estimates from a number of sources in putting together its 2009 numbers.

Based on census estimates, American Samoa hosts 15 FAS citizens; the CNMI, 2,100; Guam, 18,305; and Hawaii, 12,215.

For the CNMI, the bureau used data from a 2008 survey of FAS immigrants, and 2000 census data to estimate population on Tinian and Rota, said Sablan.

For American Samoa, the bureau used data from the 2000 national decennial census.

The bureau used the 2008 FAS survey for Guam. For Hawaii, the number came from a three-year average data collected from the American Community Survey.

“Because the CNMI population of FAS citizens is now 6 percent of the total number of FAS citizens in eligible jurisdictions, the CNMI receives 6 percent of the $30 million in available funds. Officials at the Department of the Interior have suggested that these changes reflect a growing economy in Guam, especially in sectors serving the military community, and the departure of the garment factories and slower tourism, industries where FAS citizens have traditionally worked, in the CNMI,” Sablan told Yumul.

Guam, which saw an 86 percent growth in FAS citizen population, from only about 10,000 in 2003 to 18,305 in 2008, will be receiving an additional $2.585 million in Compact Impact funding.

In FY 2010, Guam’s Compact Impact funding is proposed at $16.827 million, from only $14.242 million in FY 2009.

Under a Compact between the United States and FAS, citizens of FAS are free to travel, work and study in the U.S. and its territories without U.S. visas.

The FAS includes Palau, the Marshall Islands and the Federated States of Micronesia (Yap, Chuuk, Pohnpei and Kosrae).

Guam, Hawaii, American Samoa and the CNMI share $30 million in Compact Impact funding that the Interior releases every year that go mainly to health, social service, public safety and education agencies for accommodating or providing services to FAS citizens.

The annual appropriation is reviewed every five years for possible realignment of allocations among recipient jurisdictions.

Gov. Benigno R. Fitial earlier said the administration will work with the Legislature to reflect the Compact Impact funding changes in his proposed FY 2010 budget.