DUE TO EXPECTED REDUCTION IN FY’16 BUDGET
The Mrianas Visitors Authority may have no choice but cut majority of its programs if Gov. Eloy S. Inos signs into law the fiscal year 2016 budget bill that was passed by the Senate and House of Representatives yesterday.
The budget bill essentially takes away MVA’s $2.5 million budget for next fiscal year by reducing it to $1.
Broken down, the $2.5 million will be divvied up to the Department of Public Work’s streetlights project ($1,802,403), Division of Customs’ x-ray machine at the airport ($200,000), x-ray machine for container and loose cargo at the seaport ($225,000), and handheld x-ray scanners at the seaport ($75,000), and the Saipan Mayor’s Office’s cleanup and beautification projects ($200,000).
The MVA board met yesterday at the Hyatt Regency Saipan, but they decided to table their discussion on the fiscal year 2016 expenditure to a later date because Inos has yet to make a decision on the budget.
The tourism body’s managing director Perry Tenorio told reporters that they did meet with Inos yesterday, but refused to discuss the results of the meetings because it was a closed-door one.
MVA programs that could be affected by the reduction of MVA’s fiscal year 2016 earmarks include Taste of the Marianas, Christmas in the Marianas, sporting events held by MVA both on Tinian and Saipan, and promotional activities that help the CNMI’s tourism arrivals increase increase.
“The local programs that we hold, the sporting events like XTERRA [Saipan Championship], Tagaman [Triathlon], etc.], and local events will be impacted,” Tenorio said.
While the MVA board has not decided to cut these programs yet, Tenorio said it is a decision that they may have to look at in the future.
Majority of MVA events promote tourism and culture in the CNMI, with the programs cut, majority of the tourist may not be pleased.
MVA’s recent exit survey showed that tourists need more shopping and night activities and the tourism body may not have the ability to supplement current activities because of the reduction of its budget.
MVA’s earmarks come from projected hotel tax earnings. In the case of fiscal year 2016 and minus the $2.5 million taken away by the Legislature, the tourism body expects to collect $8.5 million in hotel tax in the next fiscal year.
MVA wants the lion’s share of what’s left to be used to promote the Commonwealth in its key tourism markets.
“We’re recommending a funding level for offshore of $7 million out of the $8.5 million,” said Tenorio.
“When we look at the total programs including the promotions offshore, marketing, and ad hoc committees locally and special events…it might be impacted greatly,” he added.
Public Law 18-1 mandates that MVA would receive 20 percent of taxes under the container tax and 80 percent of taxes from the hotel occupancy tax.
The intent of Public Law 18-1 according to MVA was that “the implied promise made to MVA partners in China, Korea, Japan, Russia, Taiwan, and here in the CNMI, that the proceeds of Public Law 18-1 will be used to ensure the continued growth of CNMI’s travel industry.”
HANMI opposes MVA budget cut
The Hotel Association of the Northern Marianas Islands, meanwhile, continues to oppose the Legislature’s adoption of the fiscal year 2016 budget sans the original appropriation to MVA.
HANMI president Gloria Cavanagh earlier told Saipan Tribune that it was always HANMI’s concern that lawmakers would eventually forget the reason for enacting the hotel tax in the first place.
“Three years ago, tourism, our only real economy, was is dire straits. Our ability to promote our CNMI was limited to an underfunded MVA,” Cavanagh said. (Jayson Camacho)