CNMI seeks a $429M bailout and federal policy changes at 902 talks
- Admin
- 31 minutes ago
- 6 min read
By Bryan Manabat
Saipan— The Commonwealth of the Northern Mariana Islands has outlined a set of federal policy and administrative changes it is seeking through ongoing Section 902 consultations with the U.S. government, aiming to stabilize public finances, revive tourism and restore long‑term economic self‑reliance.
The CNMI is also seeking $429.1 million in a temporary bailout to help the commonwealth pull through
At a press conference Wednesday, Gov. David Apatang said the CNMI panel presented a united front in Washington, D.C. during a series of high-level meetings from Feb. 17 to 20. The governor was joined by CNMI Del. Kimberlyn King‑Hinds, senior policy advisers, cabinet officials and private‑sector leaders.
Virginia Villagomez, director of the Office of Management and Budget, said the $429.1 million in financial assistance the CNMI has requested would be delivered as annual allocations of $61.3 million, apportioned among operations, economic development and infrastructure.
"This is the seven‑year plan," she said.
The plan gradually shifts allocations from operational support toward development and infrastructure.
Officials emphasized that the CNMI is not seeking permanent bailouts but rather the “tools” and policy adjustments needed to rebuild its economy.
“In that funding agreement, we are talking about the $60 million a year in federal funds that will go toward economic development and government operations," said Tracy Norita, finance secretary and head of the Fiscal Working Group.
"We have 30 days to finalize this. We are meeting with Interior weekly, and we hope to have a final multi‑year funding agreement," she added.
Norita said the funding comes with requirements, including fiscal reforms, austerity measures, creation of a revenue council, and catching up on single audits.
She stressed that near‑term federal administrative actions are essential because “there is no current funding vehicle to help us with our immediate needs.”
The fiscal team is also urging the Internal Revenue Service to reinterpret Covenant Section 603(b) so that corporate taxes generated by CNMI‑based activity but paid to the U.S. Treasury are returned to the commonwealth.
Norita said the tax reimbursement could yield an additional $20 million in revenue for the CNMI.
Although the IRS initially disagreed, she said the CNMI is “pushing back with our own arguments” and maintains that the commonwealth is entitled to additional cover‑over funds because the taxes are “derived from activity within the CNMI.”
The CNMI is using the 902 process to seek administrative and regulatory adjustments to its immigration and labor system, aiming to balance federal priorities for protecting U.S. workers with the commonwealth’s continued need for foreign labor.
Through its joint Immigration and Labor Working Group with the Department of Homeland Security, the CNMI is seeking short‑term administrative flexibility in the transitional worker program while Congress considers longer‑term fixes.
The commonwealth is sharing detailed labor‑demand data and pressing for a framework that meets federal requirements without cutting off the skilled workforce needed for tourism, construction and other core sectors.
Clement Bermudes Jr., GCEA executive director, said the effort focuses on “how we can expand workforce development and meet the federal administration’s labor needs and the prioritization of U.S. workers while still maintaining this understanding that we have very specific needs in the commonwealth.”
He added that the CNMI is also “trying to see what the transition parameters look like outside of a legislative fix” while King‑Hinds advances a successor framework.
Earlier, King‑Hinds circulated a draft Northern Mariana Islands Labor Stabilization Act for community review. The proposal includes a 10‑year extension of access to foreign labor, stronger enforcement tools, thr removal of the touch‑back rule, restoration of Section 703(b) fee cover‑overs, expanded disaster‑related eligibility, and a pathway for certain individuals who fell out of status during or after the pandemic.
She has emphasized that the proposal remains open to refinement to reflect the realities of the CNMI workforce and economy.
With the tourism‑driven economy still struggling from reduced air service and federal regulatory barriers, the Tourism and Transportation Working Group is advancing a package of federal policy changes to restore visitor arrivals.
These include adjustments to Annex 6 of the U.S.–China Air Transport Agreement, reforms to protect and expand the Guam‑CNMI Visa Waiver Program, and efforts to leverage U.S.–Korea and U.S.–Japan trade and investment agreements.
Joe Guerrero, private‑sector representative and GCEA co‑chair, said the strategy is to “look at things that can provide us immediate relief. No one is saying that any one of these initiatives is the silver bullet to our economic problems.”
He said discussions also include “leveraging the trade and investment agreements between the U.S. and South Korea and the U.S. and Japan.”
Guerrero noted growing federal alignment on cabotage, saying the group is “seriously looking at the removal of cabotage restrictions” and that even the Department of Defense now recognizes how such limits affect its regional posture.
Alex Sablan, chair of Tourism Recovery Task Force, emphasized correcting outdated narratives in Washington.
He said the CNMI sought to meet with groups and agencies "that have been somewhat critical of CNMI issues, and to kind of dispel a lot of the issues focused on a discretionary parole program of the recent past.”
He said agencies responded positively, noting DHS reported an overstay rate “at less than a quarter percentile.”
Sablan said the initiatives discussed “are really initiatives that the federal government could provide today, at no cost, but would be absolutely empowering for the CNMI,” all aimed at improving air service and “bringing the customers to the CNMI,” a point he said King‑Hinds continually stresses.
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The CNMI is aligning parts of its 902 agenda with the Department of War's regional posture, pursuing arrangements that strengthen national security while generating local economic activity through increased port calls, infrastructure upgrades and streamlined regulations.
Brien Sers Nicolas Jr., Commonwealth Bureau of Military Affairs policy adviser, said the CNMI and DOW are discussing “opportunistic aspects that would benefit and have mutual benefit,” including “increased port visits” and infrastructure improvements to airports, seaports, and utilities that would better position the CNMI to support the department's initiatives while lowering local energy costs.
He said proposals must “have a nexus that provides for better opportunity for the people of the commonwealth.”
Apatang underscored the economic value of ship and submarine visits.
“I highly encourage them to start getting some submarines to visit us here in the Commonwealth, because every submarine that comes in, it’s actually around about over 2,000 sailors,” he said. “If they spend about a week here, that’s about a week of people occupying the hotel.”
He added that he wants “as many military activities here in the Commonwealth as soon as possible” to support hotels and the Marianas Visitors Authority.
The CNMI has anchored its 902 agenda in the principle of seeking a “hand up, not a handout,” arguing that the commonwealth has already shown it can sustain its own economy when federal policies align with local realities.
The goal is to restore and modernize the tools that once allowed the CNMI to thrive—multi‑year fiscal stability, fair tax treatment, labor and immigration flexibility, reliable air service, and military‑linked infrastructure—so the government can move from crisis management to long‑term resilience.
“We’ve proven to the world that we have the ability to build an economy that can sustain its own government operations. We’ve done it before, and we can do it again, but we need federal assistance," said Mike Sablan, 902 adviser.
Former Judge Wesley Bogdan said the strategy is to maximize what can be done without new laws.
“We’ve gone and asked for as much help as we can without requiring any type of additional congressional actions,” he said. “The federal partners are really willing to work with us. There’s no antagonism. It was all very supportive.”
Jason Osborne, a Washington‑based adviser, said federal agencies are actively engaging.
“We have given the federal government plenty of different options and are trying to work with them on every single proposal that we’ve put forward,” he said. “They’re actively working on how to help us in those endeavors. The fact that they’re listening and continuing to engage, which is something I haven’t seen in a very long time… we’re not taking no for an answer. We’re continuing to go back and offering other alternatives and other solutions.”
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