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House discusses budget cut options

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THE House of Representatives on Thursday discussed ways to “trim” the fiscal year 2020 budget in light of the drastic decline in tourist arrivals due to the suspension of flights from China in response to the novel coronavirus or 2019-nCoV outbreak.

In an informal meeting in the House chamber, Speaker Blas Jonathan Attao presented two budget cut options in anticipation of a $40 million revenue loss.

The revenue projection for fiscal year 2020, which started on Oct. 1, 2019, is $233.2 million. Of this amount, $148.8 million was appropriated for government operations.

The speaker noted that $40 million is [nearly] 20 percent of the total revenue projection.

He said this means that the governor, through his emergency power, can either impose a 20 percent across-the-board cut or allow the Legislature to amend the budget law.

Speaker Blas Jonathan Attao, background left, presides over an informal meeting of House members on Thursday.  Photo by Emmanuel T. Erediano

Attao said he and his colleagues should “prepare ourselves for the financial impact” of the CNMI’s economic situation.

“We have been through this in the past. We can utilize the information on how we cut back then. If it worked back then, we can make it work now,” he said.

No decision was made in the “informal meeting,” but according to House Ways and Means Committee Chairman Ivan Blanco they are expecting a letter from the governor today, Friday, recommending adjustments to the FY 2020 budget.

Blanco said the governor’s letter is likely to include the Finance secretary’s explanation regarding the reduction in revenue projection.

The governor has directed the Finance secretary and the Office of Management and Budget “to undertake an immediate cost-impact analysis and make recommendations within 30 days for adjustments to our FY 2020 Budget consistent with the CNMI Planning and Budgeting Act.”

That analysis, he said, “shall be furnished to the Legislature for consideration and consultation as needed.”

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