CNMI leaders on Sunday announced plans to revise the government’s current budget to address the “urgent fiscal challenges” facing the commonwealth.
“While it’s not easy to share this news, I believe we must confront our challenges openly and work together to find solutions,” said Governor Arnold Palacios.
Updates from the CNMI Department of Finance and Marianas Visitors Authority have indicated positive economic activities, including an uptick in tourism arrivals from flights and cruise ships, the resumption of Hong Kong Airlines passenger service to the CNMI, the accelerated movement of large-scale infrastructure projects, and heightened emphasis on tax collection activities.
However, Finance Secretary Tracy Norita indicated that although some of these activities have contributed to the increase in hotel occupancy tax revenues, they have not been sufficient to offset declines in other revenue categories, most notably excise and business gross revenue tax collections in the second quarter.
This is an indicator that imports of general commodities and high tax-value items such as cigarettes and alcohol have declined, impacting revenue forecasts and actual collections, officials said.
“In light of these economic realities, I want to emphasise the importance of fiscal responsibility and prudence in managing our commonwealth’s finances,” Palacios said.
“In confronting fiscal challenges, we must approach them with compassion, especially when considering how the most vulnerable in our community will be affected,” the governor added.
Officials said the commonwealth’s revenue forecast for FY 2024 will be revised downward and spending priorities will be reset.
The finance department will continue to track revenue collections to determine to what extent the current budget will need to be adjusted.
“We are committed to working together to ensure that essential services are not disrupted, ensure both legislative houses address fiscal legislation in conference committee, ensure fiscal transparency, and closely monitor revenue updates while we collectively and actively navigate through the difficult decisions for our Commonwealth’s long-term stability and prosperity,” said Senate President Edith Deleon Guerrero.
“We will be looking at immediate, time-sensitive measures that will impact the current budget, and we will also be evaluating the FY2025 budget and other legislative initiatives that can help stimulate growth and provide vital support,” Speaker Edmund Villagomez said.
“I understand that some of the measures may involve sacrifices and adjustments for many individuals and agencies,” Palacios said. “However, I believe that by working together and making informed decisions now, we can lay the foundation for a stronger and more sustainable economic future. We have overcome challenges before, and I do not doubt that we will emerge from this period of uncertainty with renewed determination and optimism.”
Palacios added that he will work with the CNMI legislature to prioritise investments in initiatives that have the potential to advance economic growth and create new opportunities for residents.
He also announced the upcoming economic summit, which will engage private sector leaders, government heads, nonprofit agencies and other stakeholders in developing comprehensive short- and long-term economic strategies.
