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December 29, 2010

What will happen when government employees cannot be paid at all? Shouldn't they expect this to happen? For six months employees have had periods of delayed paychecks. In fact this will be the 7th time their pay has been delayed this year. Hours were cut from 80 to 64 per pay period with the promise that if that step was taken there would be enough revenue. Wrong.

Now the government employees will not be paid before the New Year. This time even the employees considered "critical" may not receive their pay. Only employees in federally funded programs will receive pay.

Meanwhile the Commonwealth Utilities Commission is disconnecting electricity to government buildings because the government owes them $2.5 million. The governor is asking that 20 government offices not be disconnected.  Charles Warren the CUC's chief financial officer said 50 offices were on the list to be disconnected. Employees in offices where the electricity was cut are on administrative leave.


The governor's press secretary said that the "financial status at this time is far more severe than the previous cases of delayed payroll." Of course it is! DUH! If there is no revenue coming in then the debt will grow, which means that the financial crisis becomes more severe UNTIL there is absolutely NO money.  Why on earth haven't the elected officials spent every minute creating a plan to raise revenue? Do they think that Uncle Sam will just bail them out? 

20 comments:

Anonymous said...

Time to protest. And time to find out the real balance in the budget. What are the legislators doing?

Anonymous said...

No money for pay, only money for Fitial's trips and special advisors. what a joke.

Anonymous said...

The general account fund balance of the government's checking account at Bank of Guam was $10,000 last Monday.

Wendy said...

Anonymous 12:40

I hope this is a joke. $10,000? That makes me so sad if that is true. What will happen to the people in the CNMI?

Anonymous said...

The people are like goats following the "Judas Goat"(Fitial) to slaughter. All to scared to make a move.
And all would probably to scared to get involved with a recall or an impeachment. (What ever could apply)because of retaliatory action against the families fom Fitail and his goon squad.
It would be worth a try if an attorney that understand the NMI law would start the appropriate proceedings, which ever could apply without the need for senate approval. (If that is possible)
This can't go on for another four years.
There is nothing left now, when will it end? and how?
What will it take to remove this disgrace to the NMI.
One thing for sure a RIF will have to happen early next month, or all are certainly doomed. maybe to little too late already.
As many have suggested before, cut the house, cut back the senate (along with many other suggestions) and whats left of the elected be put on "part time".
Without knowing the legal procedures, even that probably would not be able to take effect to help at this stage in the game.
But one thing for sure, FITIAL HAS TO GO.
That would be a start on the road to recovery.
Back to the question though, is how to remove him him as the rest of the elected will not make a move nor probably support it.
Maybe there is a lawyer out there that knows the quickest and easiest way. If there is one.

Anonymous said...

I feel really sad and sorry about what's happening now or the worst that is about to happen in the CNMI. It's getting worst everyday and yet those in the authority has done nothing. Can they not think of some ways to correct this? Maybe they have nothing in mind or their mind is also EMPTY. Better they step down and BEG with the Federal gov't. THERE'S NO MORE HIDING NOW. EAT THOSE CNMI PRIDE, rather than NOTHING TO EAT AT ALL. We are part of the US but we are the ONE WHO IS PUTTING US APART BECAUSE WE DO NOT COOPERATE AND WE DO NOT WANT TO BE TOTALLY RULED BY THE FEDS. Where in the hell is that thinking comes. Maybe the FEDS is still testing how far we can keep still that mind set.
My advise: ASK AND SEEK FOR ALL FEDERAL SUPPORTS AND GIVE UP NOW. LET'S THEN WATCH AND SEE WHAT THE FED GOV'T HAS ALL UP FOR US AND THE CNMI. SURELY AS WITH THE REST OF THE STATES, CNMI WILL PROSPER.
HAVE THE SADDEST NEW YEAR CELEBRATION TONIGHT, BUT KNOW THAT AFTER THIS, A NEW AND PROSPEROUS YEARS AWAITS US ALL... IF ONLY WE COOPERATE AND ALL CHANGE.

It's not your money! said...

Generating revenue (raising taxes) will worsen the problem. It's the classic "death spiral," in that each time you raise taxes you drive more taxpayers and business owners away, which means the remaining few have to shoulder an ever-increasing burden. The answer is to learn to live within your means. Most of the budget is payroll. Everyone knows there are too many unnecessary government workers. Lay off 1000 or so, and you'll have all the money you need without having to curtail essential services. Zaldy's editorial in the Variety hits the nail right on the head.

Wendy said...

It's not your money

(Love your name) About taxes - I think EVERYONE should contribute to their government because EVERYONE uses the roads and government services, etc. Businesses in the CNMI already pay taxes. I am not talking about raising business taxes.

A sales tax -say 5% on purchases- will not put anyone out of business and it will bring in lots of revenue, especially on big ticket items like cars. We pay 6.5% sales tax on items in FL, except for some exempt items like some foods. I do not even notice the charge. States without sales tax generally have a state income tax. (I never lived in a state with income tax so I can't comment except that we already pay too much in federal income taxes that our officials like to squander.)

Property tax also brings in revenue and is not a deal breaker. If you have a little house (like me) you pay a smaller amount of tax than someone down the street living in a mansion -seems fair. Some states also charge an annual tax on vehicles -boats, cars, etc.

Of course, cutting spending will help and eliminate some costs and cutting unnecessary government jobs will help, but it is NOT the solution. Far more revenue has to be raised. I would have to look at the books to make an accurate assessment, but read this post, Not getting the Message that lists just some of the UNPAID BILLS that the CNMI has,and you will see that just cutting jobs is not enough. There is a large and growing deficit that has to be paid.

Read this post, Cutting the Pie, which discusses part-time legislature, It is laughable that the CNMI has a full time legislature -absolutely ridiculous! Not just because it is fiscally irresponsible, but because so little of value is accomplished.

There has to be a revenue-raising plan. Maybe some people in the CNMI like the idea of casinos (they cant compete with casinos in say Malaysia) or marijuana (not going to bring in the money you need, and any revenue generated will be used to fight the increased crime). It seems that people are looking for a quick fix of sorts. Taxes have to be considered.

Anonymous said...

10:22 is spot on. Businesses must pay adequate taxes. Businesses that can't or won't, shouldn't be doing business in this community. Businesses here DO NOT PAY ENOUGH in taxes, and the QC is a joke. At the same time, the government needs to decide what the most important programs are, and what are the necessary staff and cut cut cut. An autonomous civil service body should oversee all hiring under cabinet level positions.

Wendy said...

Anonymous !0:37

Businesses are required to pay taxes, but do they? Are there some that don't, just like there are employers that don't pay their workers. ENFORCEMENT is lacking in all programs in the CNMI. I agree that sound businesses can afford taxes. I had a licenses business in the CNMI and I paid taxes (very low taxes) quarterly. Is that still the procedure?

Anonymous said...

Yes, business gross revenue tax rates have not changed since you were here, though there are plans for BGRT to be remitted monthly vice quarterly.

Happy New Year, Wendy!

It's not your money! said...

Wendy:

We do pay taxes, although not an outright sales tax or property tax, both of which would be good ideas. Our income taxes max out at about 9%, and in addition, goods that are brought in are assessed a 5% tax to the vendor that is passed onto us. Sales tax would be a good idea because our tourists would pay a good deal of it. Property tax is a mixed bag: one the one hand, there is not enough property here to make a property tax a revenue generator, i.e., the cost of collecting it would outweigh what is collected; one the other hand, imposing a property tax would be a disincentive for property owners to let their land lay unused, which would encourage improvement development.

Anonymous said...

Sales tax is a good idea, but property tax will never pass. Local will never agree to a tax where the entire burden of the tax is on their shoulders.

The government really needs to work at maximizing federal grants and putting them to work right away. They may be able to swap a number of civil service positions with federally funded jobs.

CHC also needs to work on their collections with medicare and private insurance. The hospital should be self-sufficient or make a profit instead of costing the government 25 million each year.

As far as cutting 1000 government jobs, that will crush the economy. Austerity is already having a terrible effect on small businesses. Small businesses are the backbone of any economy and if we cut 1000 government jobs, we might as well cut all government jobs because there will not be revenue from small businesses to pay the remaining 3000 worker's salaries.

Anonymous said...

Those much needed federal grants have been and are being mismanaged and lost.

Tax and Rev needs to work on their collections.

Property taxes will help solve many problems, like vacant buildings and increased revenue.

It's not your money! said...

Cutting 1,000 jobs will crush the economy? I don't think so. What is crushing the economy is paying 1,000 people a salary and benefits and not getting anything in return. If funding no- show jobs was the way to prosperity, then the CNMI would be like Dubai. The only way out is to balance the budget. Nobody gets to spend more than they take in for long. Continued funding of a bloated workforce jeopardizes the CNMI government's ability to provide necessary services like electricity, medical care, education and emergency services.

Wendy said...

It's not your money

Too bad you aren't a CNMI legislator. You are so right in this comment.

Anonymous said...

Cutting 1000 government jobs will crush the economy. Locals have a much higher capture rate of their income on the island due to land ownership policies and civil service opposed to contract status. Locals spend more money in the economy since they generally do not pay for housing. Their entire paycheck goes mostly to small businesses.

If we can swap out the 1000 government workers and replace them in the private sector, we would be okay, but for their income to be lost entirely will have a severe impact on small business.

People keep talking about small businesses being scammers, but most pay taxes and those taxes pay the government employees salaries.

Anonymous said...

The problem with the CNMI government is that there is no way to know which jobs are actually unproductive to cut. Cutting 10% or 20% of each department is unwise. In areas of collection and enforcement, hiring actually needs to increase. How can we call collections "non-essential". Anyone involved directly in securing CNMI revenue should be considered "critical".

Anonymous said...

That is why we need more desk audits.

Whatever happened to the ones done on DCCA and DPS? The press should not "forget" this issue like they do so many others.

Anonymous said...

Cutting 1000 government jobs without available private sector jobs will be disaastrous to the economy. Just look at what has happened to the collections in the last two months with cuts and late paydays. Christmas, which is usually a make or break period for businesses, will prove to be a bomb when numbers are released. Let 1000 government workers go, and just the cost resulting from the uptick in crime will be outlandish. Government needs to be cut in a careful and planned way. Lobbing off a thousand is just Dumb.