Fiscal Affairs to also look into ‘unforeseen circumstances’

The Senate Fiscal Affairs Committee intends to take into consideration “unforeseen circumstances” when they deliberate on the fiscal year 2020 budget of the CNMI government.

This early, the administration of Gov. Ralph DLG Torres is already looking at a budget shortfall following the widespread devastation wrought by Super Typhoon Yutu in October last year.

Yutu, which particularly devastated Saipan and Tinian, caused significant damage to homes and other infrastructure, which also spilled over to the CNMI economy as some businesses had to also close down due to their facilities being destroyed and with zero tourist activity.

Committee chair Sen. Jude U. Hofschneider (R-Tinian) said unpredictable circumstances have to be taken into consideration when they sit down to hammer out the budget.

“We have to take heed on the unforeseen circumstances like Medical Referral, [the Department of Public Safety], natural disasters, etc. All this play a key part in any given [year] in terms of government function and operations,” he said.

“That’s the reason we are laying the foundation right now. Now, that we have fully known the fiscal year 2018’s situation, the [Fiscal Affairs] committee is working in getting more information on the actual collection for the first two quarters of fiscal year 2019.”

He added the information about fiscal years 2018 and 2019 would help the Legislature prepare for fiscal year 2020. “The information that we got from the result of this and the information that we’re going to get in the next few weeks, with respect to first two quarters of collection and expense will give us an idea of on how are we going to approach [fiscal year] 2020,” he said.

Hofschneider said they are also looking at areas where the government had overruns, as they need to anticipate a potential shortfall on revenue projection at the start of 2019, an economic effect brought by Yutu. “Now that we are in [fiscal year] 2019 going to [fiscal year] 2020, we need to see the first two quarters on how the Yutu experience affected us in terms of collection of revenues.”

In his report after reviewing the fiscal year 2018 budget, Legislative Bureau fiscal analyst David Demapan pointed out that the CNMI general fund incurred a total of $25.9 million deficit and the budgetary basis exceeded the budgeted amount by $27.1 million.

Eight government agencies and departments were tagged as major contributors to the overrun: Medical Referral ($13,158,509), Medicaid local expenses ($6,392,038), Department of Public Safety ($1,854,594), disaster expenditures ($1,204,508), Department of Corrections ($1,137,728), Department of Fire and Emergency Medical Services ($672,255), Department of Finance ($249,755), and Rota ($220,752).

Hofschneider said there won’t be any way for local patients not to use medical referral. “[But] we need to find the driving force behind the upward trend. It can be any reason and it will be hard, but we need to know. So, we could focus on how to narrow it down. Close the gap.”

“There’s absolutely…no way for us not to use medical referral and sending our patients out. The facilities and specialists are not all available on the island. But [the Commonwealth Healthcare Corp.] management is doing their best to treat everybody here, based on the availability of the services.”