Business people heaved a sigh of relief yesterday after hearing directly from the Fitial administration that no tax increases would take place despite the fiscal quagmire that the government is currently in.<\/p>\n
\u201cIt\u2019s reassuring to hear the governor say that business taxes won\u2019t be raised. We feel relieved. We truly welcome it,\u201d said Saipan Chamber of Commerce president Charles V. Cepeda in an interview shortly after yesterday\u2019s State of the Commonwealth Address.<\/p>\n
In his first Commonwealth Address, Gov. Benigno R. Fitial said his administration would spare the private sector from tax hikes to ensure the continued flow of revenues.<\/p>\n
\u201cWe will support the private sector in building the economy. We do not intend to ask more from the private sector by raising business taxes. More sales will lead to more taxes. Not more taxes on sales,\u201d said the governor.<\/p>\n
He said it is part of the goal of promoting the Commonwealth \u201cas a community that welcomes serious and responsible investors.\u201d<\/p>\n
\u201cThis message is having results,\u201d said Fitial, as he cited signs of rising investor confidence, including Duty Free Shoppers\u2019 plan to expand its operations on Saipan, interests of casino investors on Tinian and other off-island investors such as Petron.<\/p>\n
DFS is said to be investing an additional $20 million in the next few years.<\/p>\n
Financial reality <\/p>\n
Jerry Tan, president of Tan Holdings Corp. and chairman of the Marianas Visitors Authority, said the governor acknowledges the fact that revenues come from the private sector.<\/p>\n
He said yesterday\u2019s SOCA was very enlightening since the governor \u201cpainted a realistic picture of the government.\u201d<\/p>\n
\u201cIt\u2019s my first time to look at the figures\u2014deficit, expenditure, projected revenues and shortfall. I believe this is a very good presentation,\u201d said Tan.<\/p>\n
Tan was referring to Fitial\u2019s report where he cited that the CNMI government is financially \u201cbroke.\u201d<\/p>\n
The governor cited, among others, that the government faces a $108 million deficit or up to $155 million in unreserved deficit, which keeps increasing since 1986.<\/p>\n
Fitial also said that the government had been overspending prior to his assumption to office in early January this year.<\/p>\n
He said that the government used to spend $21 million a month but his administration managed to trim it down to $17.75 million as of last month.<\/p>\n
This month, the governor said he hopes to further reduce the monthly spending to some $14 million.<\/p>\n
Fitial had also revised the annual appropriation of $213 million to $198.5 million for lack of revenues.<\/p>\n
Wake up call<\/p>\n
Triple J Motors general manager Jay Jones said the governor\u2019s presentation and pronouncement that the government is broke is a \u201cgood wake up call.\u201d<\/p>\n
\u201cA lot of people are not convinced of the economic situation. The governor stated very clearly that the government is broke,\u201d said Jones.<\/p>\n
Apparel factory owner Paul Zach said Fitial made \u201ca great presentation.\u201d<\/p>\n
\u201cReality is reality. I\u2019ve had an inkling of the situation but it\u2019s my first time to see the figures. Now words and figure fit together. It\u2019s not \u2018pretty darn good\u2019 as somebody said,\u201d said Zach.<\/p>\n
In the past two years, former Gov. Juan N. Babauta had described the Commonwealth as \u201cpretty darn good.\u201d<\/p>\n
\u2018Govt is not broke\u2019<\/p>\n
Cepeda, for his part, said Fitial\u2019s presentation showed \u201cthat we are in a very difficult situation.\u201d<\/p>\n
\u201cBut government is not broke. There\u2019s still revenue coming in,\u201d said Cepeda. \u201cWe just need to cut our expenses and come up with ways to boost our resources.\u201d<\/p>\n
House minority leader Arnold I. Palacios expressed a similar view. \u201cThe government is not broke per se,\u201d he said.<\/p>\n
Palacios assailed the governor\u2019s \u201cexemption\u201d of businesses from possible tax increases.<\/p>\n
\u201cWhat he [governor] is saying is not feasible. There are two ways to overcome the situation\u2014to cut expenses and raise revenues. We should do both. You can\u2019t exempt one sector. He doesn\u2019t want to raise taxes but the reason why there\u2019s tax is to fund the government,\u201d he said.<\/p>\n
He said the governor should be looking at all areas such as reducing tax rebates, utility rates adjustment, and the like.<\/p>\n
\u201cEverybody got to share. We are all part of one Commonwealth,\u201d said Palacios.<\/p>\n","protected":false},"excerpt":{"rendered":"
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