Math is to politics what rain is to a parade

Live from Saipan By Zaldy Dandan

Saipan — At a recent legislative hearing on an investor’s proposal to lease a former hotel property, a concerned citizen said that depending “on tourism as bread and butter has not been working.” She said flights to Saipan were not full, and neither were hotel rooms. She asked rhetorically, “So, is this the type of development that we need at this time? Do we need more hotel rooms? Do we need another golf course?”

Legitimate questions all. As the late Jesus Sablan Leon Guerrero noted in his charming autobiography, “Jésus in Little America,” new investments are often controversial because there are those who desire development and those who do not. The founder of the Bank of Guam, Leon Guerrero also mentioned that “outstanding citizens” who oppose development still benefit from it.

Here in the Commonwealth of the Northern Mariana Islands, the contrast between the state of public education, public health, infrastructure, and living standards before and after the local economic boom of the late 1980s and early 1990s is astounding.   

The two are at opposite ends of the spectrum.

But it seems that not a lot of people — including politicians — are familiar with events that happened more than a week ago. Many of us are also blissfully unaware of the connection between the state of the economy and the government’s ability to provide public services.

So sure. Let’s say no to new development projects. Let’s “nurture” small businesses instead— “the backbone” of the economy, as some would like to say without realizing that in the CNMI, the actual backbone of the economy is its government, sustained by taxpayers’ money generated by the local and U.S. economies.

For some “concerned citizens,” however, reducing the size of the economy is preferable to reducing the size of the government—which, again, is a legitimate policy stance, but poor arithmetic.

Today, if most of us are content with the persistently low tourist arrivals and hotel occupancy rates — fine. But we must also expect less from the government — unless we are willing to pay higher rates of taxes and government fees. And for what?

As a long-time resident would put it: “I pay about $4,000 a year in taxes to the CNMI government, but my kid goes to a private school. I pay for my health insurance, utility bills and rent. I never bother the police or any other government agency for anything — and I know damn well that ongoing road improvements are paid by the feds. So what do I get out of the taxes I pay to this government?

The realization that I — along with others — am enabling the continued existence of redundant government agencies and their employees, who should be working in the private sector.”

Four years ago, as Covid-19 restrictions were shutting down the global economy, the U.S. government funded a four-day CNMI Fiscal Response Summit to, among other things, “recommend wide-ranging reforms to respond to mounting fiscal challenges.” The participants included the top officials of the three branches of government, the mayors, government agencies, the hotel association, the chamber of commerce and non-government organizations.

Experts from the Graduate School USA provided technical assistance.

The CNMI budget numbers were crunched. The original, pre-Covid FY 2020 government budget was $148 million. The estimated deficit for fiscal years 2020, 2021 and 2022 totaled $64.8 million, $85.2 million and $36.9 million respectively. These numbers were staggering.

As the summit discussions also indicated, less government revenue would mean less government — in terms of agencies, services and employees. Several cost-cutting measures were proposed. These included a reduction in the number of government agencies, work hours and/or personnel, government travel, professional services, pension payments, medical referral costs and “all others.” Summit participants also discussed raising taxes and government fees as well as imposing new taxes.

For CNMI officials at the time, I’m pretty sure that evaluating the summit recommendations was like trying to decide which of their limbs should be amputated first without anesthesia.

Unlike most “concerned citizens,” however, the summit did not flinch from arithmetic.

“This is something that our Commonwealth should have done a long time ago,” said the then-lieutenant governor in his remarks during the summit. Two years ago, he was sworn in as the new governor. He called himself a “fiscal conservative” and said “everything is on the chopping block,” and that he didn’t “want to go out and raise taxes again and impose the penalty on the businesses and the people of the Commonwealth because of the misappropriation [and] misdeeds [of] government officials.”

Everyone cheered, present company included.

Months later, the new governor proposed tax hikes. The following year—an election year—he rescinded a modest austerity measure — a work-hour cut — that affected executive branch employees only.

Last month, he submitted a budget proposal that, he said, would avoid cuts to government hours. But because the tourism-based economy is still down, he said his administration intends to borrow money again. He will also continue asking the feds for more funding assistance, which he insists is not a bailout. As for lawmakers, he said they should consider “innovative, sustainable revenue-generating measures” — i.e., taxes.

So much for “change.”

The late former CNMI Gov. Froilan C. Tenorio once said, “This is the thing. I just have to tell the people, ‘Look, if you want me to provide you the services that you expect from the government, then you’d better favor economic development.'”

Still, more power to those who do not want development or are opposed to new proposed investments. However, to be more persuasive, they should also specify which government agency, service, or program has to be abolished or downsized, and which government employees would consequently lose their jobs.

As former President Bill Clinton once said, “Arithmetic!”

Zaldy Dandan is editor of the CNMI’s oldest — and only remaining —  newspaper, Marianas Variety. His fourth book, “If He Isn’t Insane Then He Should Be: Stories & Poems from Saipan,” is available on amazon.com/.