CNMI financial crunch means Government layoffs loom
Updated
The Commonwealth of the Northern Mariana Islands government is going to have to lay off contracted workers to cope with a lack of money with Governor, Benigno Fitial blaming the legislature for passing what he describes as a fiscally irresponsible budget which did not include austerity measures. He's told the mayors of the islands of Rota, Tinian and Saipan that their budgets will be cut, and they will have to decide which of their non-permanent staff will have to go.
Presenter Bruce Hill
Speaker: Spokesman for the Commonwealth of the Northern Mariana Islands Governor Charles Reyes
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HILL: There's no word on exactly how many jobs will be lost, although it's clear the cuts will be primarily among staff on contracts, as the jobs of permanent civil servants are protected by law. CNMI's bad financial situation has not been a secret for some years, but the Government staff insist the current crisis was none of his making. Governor Fitial's spokesman, Charles Reyes, says much of the blame lies with the Commonwealth legislatures budget, although he says the economic situation in the CNMI has made a bad situation even worse.
REYES: The garment industry is completely non-existent now as of last month so we lost our manufacturing industry which at one point at the peak provided about a billion dollars a year in revenues. But that is completely gone and then of course we suffered challenges with our tourism industry and so now we are only reliant on one industry which is tourism and we're facing some challenges in that area as well, given the global economic downturn, as things get difficult in Japan. Japan is officially in recession, two quarters of consecutive negative economic growth, so the spending has been reduced and the traffic jump from Japan has also been reduced and the flights have been curtailed as well by Continental Airlines, which eliminated all direct flights to Japan.
HILL: Charles Reyes says although the financial crunch is going to hit the Northern Mariannas Islands hard, things are tough all over and that includes the primary destination of CNMI citizens who go overseas for work, the United States.
REYES: It is a global situation actually, since the CNMI is not the only jurisdiction with financial problems. Many states in the US, particularly California, have been encountering very significant financial problems. Even our neighbouring island of Guam actually has more financial problems, although their economy in the private sector is strong. They have enormous debt and challenges and so this is nothing unusual for Pacific Island territories or even in the States and the mainland US. What's interesting is that I have been receiving reports that some of our residents who moved to the States are now coming back. We had an exodus of local residents going to greener pastures in the United States, in Las Vegas or California, for example, Hawaii, or especially in the West Coast and Oregon and Washington, but it looks like things are bad there now that the residents are coming back.
HILL: Well, how bad is it in CNMI? I mean are people going to have to lose their jobs as a result of this?
REYES: Well, Government jobs, yes are in jeopardy because of the budget override. In the legislature, the Governor vetoed their budget, that actually was not a balanced budget, and for political reasons, this being an election year, in November, they decided to override the Governor's veto and so impose their budget and it actually doesn't add up. The governor had expressly asked the legislature to incorporate some austerity measures into the budget, which they for political reasons refused to include. If we had received cooperation earlier on, we would have saved funds and we would have saved jobs, but at this point it looks like we're given no choice but to incur serious cuts including personnel cuts in order to have a constitutionally balanced budget.
HILL: Any idea how many people will lose their jobs?
REYES: No, I don't have the numbers. I think the special assistant for administration and the office managing the budget, they are working on those projections and those plans right now and once we have those plans finalised, then of course we will be communicating it to the public and of course it won't be pleasant. The legislature will try to put the blame on the Governor, but this is really their own making, because of the irresponsible political move to pass a budget that is actually not sustainable by the revenues that we collect.
