On why Saipan casino revenue projections came so late in the fiscal year and near budget deliberations for next year, Department of Finance Secretary Larissa Larson says these revenues are “separate from the budget” and are a “special source of funding.”
“So it’s different. It’s not something where they have to follow the budget schedule,” Larson said, responding to questions from Saipan Tribune on Friday.
“There are issues we have with disclosure,” she added. “We have to have the right to disclose the information because all tax information is protected. So until we have that we can’t reveal it, even if the law says that money is available.
Some House of Representatives lawmakers have criticized the Finance Department for coming slow with these figures but Larson indicated that revealing the figures at this time was appropriate or “worthwhile.”
“So we got the disclosure. Then the payments started increasing recently, so it’s worthwhile to do the appropriations now—that’s why what’s prompting all of this,” she said after a budget hearing with the House of Representatives on Friday.
As for fiscal year 2017 projections, Larson said “we haven’t got that far.” “…This is a new industry for the CNMI, we don’t have any trends to look at. We kind of have to see what’s coming. We are working on projections with the [Commonwealth] Casino Commission but we don’t have them yet. We are working with what we have now because it’s a sizeable amount of money now we can use.”
The CNMI has received $30 million in casino revenue taxes from the Saipan casino, Best Sunshine International, Ltd., as of July 30, according to Larson on Friday.
As for the reported $47 million in casino taxes for this fiscal year, Larson emphasized this was “a projection” and “not actual.”
“They are projecting in the next couple of months we will collect a full $47 [million],” she said.
During the hearing Friday, Larson also spoke to recent proposed bills to add new government agencies eligible for Saipan casino tax funds under the casino law, or “amendments” to casino law “where the BRGT can be applied.” Some new bills have proposed making the departments of Fire and Public Safety eligible, for example.
Larson said during the hearing that they need to think about retirees and look into the possibility of setting aside portion of BGRT in case of any disruption to retiree benefits.
House vice speaker Joseph Deleon Guerrero (Ind-Saipan) has introduced a bill to essentially set aside $5 million of the casino BGRT to cover the “shortfall” in funds to retirees in the fifth year of casino. The CNMI government took the first and fifth year casino license application fees upfront, leaving a gaping hole in the fifth year.
“We just need to anticipate and set some money aside so we don’t disrupt our retirees’ payments,” Larson reiterated in the interview. “The 75 percent [pension] is already covered by the [government] appropriation but the 25 percent is the one that is depending on the funding availability. So we just have to think ahead, so we don’t struggle at the last second to come up with something.”
Finance asks for $4.8M
Larson says they are requesting $4.8 million for their department’s budget, in line with Gov. Ralph DLG Torres’ original proposal.
Finance has plans to hire a lawyer specializing in taxes and to bolster their enforcement section with more officers.
“We actually have a legal counsel coming on board. He’s very experienced. He has a tax degree as well as a law degree. Something really critical to not only Finance but the CNMI, as we come across tax issues,” Larson said. “It’s good to have someone with the experience, the specialized expertise to answer questions.”
Larson also added they are “always beefing up” enforcement.
“It’s something that hasn’t really been done for a long time, so step by step we are working toward a really strong enforcement unit,” Larson said. “Not only on the enforcement on cash receipts and business licenses but also the actual filing of taxes and so on, to make sure people are filing properly.”