MARIANAS REVENUES HIT ROCK BOTTOM

PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

MARIANAS REVENUES HIT ROCK BOTTOM
US$170 million lowest since 1995

By Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, April 10, 2008) – The approximate US$170 million in identified government resources for fiscal year 2009 is the lowest in 13 years, documents obtained by the Variety showed.

The Department of Finance said its collections may reach US$169.5 million this coming FY 2009 but the government will be left with just US$158.4 million for its operations after all its mandatory financial obligations, which include US$7.5 million in bond payments, are deducted.

According to a summary of revenue collections, the Commonwealth of the Northern Mariana Islands (CNMI) collected over $199 million in FY 1995.

In that year, the government’s direct tax collections from businesses totaled $168,890,601.

This amount was greater than the CNMI’s FY 2007 budget of $163.5 million.

Projected resources this FY 2008 will reach $171.4 million but the government will be left only with $160.1 million after mandatory deductions are made, according to the Finance Department.

Separate collections made in 1995 in terms of licenses and fees raked in a total of nearly $200 million for the government.

In 1996, tax collections totaled $216 million. Of this figure, over $182 million were from direct taxes from businesses.

In 1978, when the commonwealth government was established, total tax collections amounted to just $5 million. But the federal government, through Covenant funds, subsidized the local government’s expenses from 1978 through 1992.

Covenant funds for the CNMI government in 1978 totaled $9.9 million.

In 1979, this went up to $12 million, leaving the CNMI government with $19 million to spend that year when its direct tax collections of $7.5 million were added.

The Covenant funds for local government operations were highest in 1986 and 1987 — nearly $18 million.

It went down to over $16 million in 1988, the year when the CNMI government saw dramatic increase in garment production on Saipan and growth in the local tourism industry.

Marianas Variety: www.mvariety.com

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