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  • By Mar-Vic Cagurangan

CNMI government cuts 2019 budget by $17.9M

Typhoon Yutu

The economic devastation caused by typhoon Yutu last year has prompted CNMI Gov. Ralph Torres to further slash government spending by $17.9 million in fiscal 2019.

This is the second round of budget cut since February.

“While the CNMI continues to show signs of recovery through improved overall collections from the previous quarter, our administration is taking the necessary steps to curb government spending as our economy recovers,” Torres said Friday.

The CNMI had a budget of $258 million for fiscal 2019 before the administration cut it by $12 million in February. The revised budget pegs the new spending level at $141.5 million.

The new budget cut was recommended by the Department of Finance in order to stabilize the commonwealth’s finances as the economy struggles to recover from last year’s disaster that took its toll on tourism, the CNMI’s main economic driver.

“The effects of this loss of economic activity lingered through the first and second quarter of FY 2019 and are still widely felt today with a 39.8 percent decline in tourist arrivals in March,” Torres said in justifying the new budget cut which he said was “a very difficult decision.”

During the recovery phase, the Federal Emergency Management Agency that has brought in more $800 million in estimated disaster assistance, according to the CNMI governor’s office.

Typhoon Yutu, the largest storm that hit the United States since 1935 that brought winds and gusts up to 200 miles per hour, plowed through Saipan and Tinian, displacing hundreds of residents and bringing the economy to a standstill for about two months.

Damage assessments found that 532 homes were destroyed and 430 homes suffered major damage. 832 residents were placed into shelters across the three islands.

“We didn’t ask to get hit by the worst US storm in 80 years, but we unfortunately did. We are not going to sit idle and let the problems of today define our future, because that is not what a responsible government should do,” Torres said.

The governor assured government employees and retirees that their payroll and pensions will be a priority.

The CNMI government now relies heavily on federal assistance to achieve fiscal recovery.

The US. Department of Agriculture Food and Nutrition Service has approved Torres’ request for $8.6 million in disaster food assistance, which gave 15,280 households food benefits. The U.S. Department of Labor approved the CNMI Department of Labor’s application for over $11 million in unemployment assistance, according to a press release from the governor’s office.


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