CNMI Gov. Ralph Torres has announced plans to further scale down the government workforce, in a drastic move that will affect about 180 employees who were furloughed last year as a result of coronavirus-related economic lockdown.
"The dire fiscal circumstances facing the CNMI have forced us to take this regrettable, but necessary step," Torres said in a Feb. 9 letter to Senate President Jude U. Hofschneider and House Speaker Edmund S. Villagomez. "This decision is incredibly difficult for us to make and is one that Lt. Governor Palacios and I did all we can to avoid."
Torres said he has directed all executive branch departments and activity heads that currently have furloughed civil service employees to immediately submit a "notice of intention to implement a reduction-in-force" form to the Office of Personnel Management.
While the CNMI has managed to keep the Covid-19 under control and maintain the residents' safety, the governor said "a government can only operate with a functioning economy to support it."
The onset of the Covid-19 pandemic early last year led to a dramatic reduction in economic activity. The shrunken tax revenue prompted Torres to cut the budget by 48 percent, resulting in a mass layoff in government.
About 516 government employees were affected with approximately 269 of that number being furloughed civil service employees. "This was done in order to ensure basic services remained operational during the ongoing public health emergency," Torres said.
The governor said the infusion of federal funding from the CARES Act and other federal grants has enabled the administration to move laid off government employees, including about 89 civil service employees from the furlough list, into federally-funded positions and other jobs related to the Covid-19 response operation.
"Our goal was to maximize federal funding in order to accommodate as many furloughed employees as we could, and we are grateful that we were able to do so given the circumstances and limited resources," the governor said.
Despite the funding realignment, Torres said the administration was unable to reinstate 180 furloughed government employees whose positions were not funded under the FY 2021 budget appropriation.
"To fully fund the 180 currently furloughed employees so that they may be recalled, it would require $5,688,239.44 for FY 2021. This is in addition to the 3 percent shortfall in anticipated revenue incurred during the first quarter of FY 2021," he said.
Torres said when furloughs and terminations were implemented, his administration was hopeful the Covid-19 threat would pass within a year and that tourism would resume.
"Despite initiatives that my administration pursued to increase economic activity such as the travel bubble with South Korea to resume tourism and increased federal funding through such programs as the Community Development Block Grant – Disaster Relief, it is doubtful that we will have enough revenue to increase the FY 2021 budget and be able to recall the furloughed employees in the next few months," Torres said.
The law authorizes government furloughs for more than 30 days "if there is reasonable assurance that the employees furloughed will be returned to duty within the next 12 months. If there is reasonable doubt regarding the return to duty of furloughed employees, then the appointing authorities concerned must separate the employees found to be in excess of management’s needs and proceed according to reduction-in-force procedures."
Torres noted that the government is now approaching the one-year mark when the furloughs were initiated and there are no signs that the economy will recover sufficiently within the next few months.
"In addition to directing full cooperation with OPM, my administration has also directed the department and activity heads to prioritize the implementation of the reduction-in-force procedures," Torres said.
"My administration knows that the RIF process will be complicated, man-hour intensive, and a cause of regrettable anxiety for employees. By giving the RIF process the attention and resources it deserves, my administration hopes to minimize any disruption the process will have on the activities of the agency and the lives of the affected employees," he added.
Torres said the CNMI is the only territorial government in the United States that is making drastic cuts of this magnitude.
"No other state or territorial government is required to undertake these measures. We are an island economy subject to the external forces of our global economy, and this global pandemic has negatively impacted the overall world economy," he added.