It now appears that the CNMI government could run short of nearly $30 million this fiscal year.
It was learned after a nearly two-hour grilling of top finance officials by members of the House Ways and Means Committee that the Torres administration expects to see a shortage of $17.9 million in what the government expects to collect this fiscal year, on top of the $12.048 million that was earlier reported. That would bring the budgetary shortfall to $29 million.
The committee resumed yesterday its meeting with representatives of the Department of Finance and the Office of Management and Budget to get a clearer picture of the status of the government’s finances.
Finance financial services manager Ryan Camacho and OMB special assistant Virginia Villagomez were on the hot seat for more than two hours in yesterday’s meeting where they answered questions from committee members.
Committee chair Rep. Ivan A. Blanco (R-Saipan) told Saipan Tribune the weekly meeting with Finance and OMB keeps the Legislature abreast of any changes in revenue collection.
“As you know, any changes exceeding or under $200,000 must be reported to the Legislature,” he said.
Based on the report submitted by acting Finance secretary David Atalig, Gov. Ralph DLG Torres had proposed a budget of $233 million for next fiscal year, with the amount available for appropriation at $147 million.
Camacho said the CNMI’s economy was experiencing a rebirth when the fiscal year 2019 budget was submitted last year, with tourism numbers up and the lone casino bringing in tax dollars.
“We have high hopes for the casino industry to continue further with their development. And with that, it all brought a lot of investor confidence in the islands. Of course, the casino industry has experienced a lot of setbacks that are not beyond our control. We also experienced a natural disaster. Businesses were slow to pick up in the first quarter of [fiscal year] 2019,” said Camacho.
“So, that could be part of the effect why collections in government revenue is not that high. We expected it to improve in the second quarter with a lot of the outside money coming in in the form of monetary relief. And that hasn’t been realized within the second quarter. We are hopeful that it continues to increase in the third and fourth quarters of 2019.”
Restaurants and other business establishments in Garapan are comparing their current earnings to the year 2013, when tourism numbers were bleak and economic activity was sluggish. There is optimism, though, that things will pick up entering the third quarter of the current fiscal year.
Camacho said that, as of October 2018 to date, the casino gross revenue tax collected was $41,000 compared to the $40.9 million in 2016, $67.7 million in 2017, and $43.6 million in 2018.
“In the past, we’ve been collecting from the casino for every month, but they have requested amendments to their tax returns and we are currently working with our legal counsel on how to approach that. The final figures are still being worked out and will be on the way,” added Camacho.
He said that the $41,000 CGRT that’s been collected so far could be the result of the amendment that was proposed by license holder Imperial Pacific International (CNM) LLC. “It could go both ways, it could go higher or zero.”
Camacho said they don’t expect to meet the $23 million, or the 25 percent reserved for the Retirement Fund. The CGRT is the source of the funding for the bulk of the 25 percent for the Retirement Fund.