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NMI government to cut personnel costs by 50%; will terminate, furlough employees

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ALL department and activity heads were “advised” Tuesday by the Office of Personnel Management that due to the economic impact of Covid-19, the CNMI government must implement “extreme measures” to ensure that the executive branch has sufficient funds to pay its employees.


In a memorandum, OPM Director Isidro Seman said this cannot be done with the government's present staffing level. “With an estimated reduction in FY 2020 budget funding of 48% the government cannot maintain its current number of employees," he added. "Consequently, it will be necessary to terminate all Excepted Service employees, other than those in federally funded positions or expressly exempted by the Governor, and to furlough sufficient Civil Service employees for a one-year period, to reduce the government's personnel costs by 50%.”
Seman asked department heads to submit to the governor’s office, Wednesday, the list of employees who “must be terminated or furloughed to effect the required reduction.”
Under the current fiscal year budget, there are more than 3,000 CNMI government personnel, including civil service employees.
In his FY 2021 budget submission, Gov. Ralph DLG Torres informed the Legislature that his administration has eliminated all vacant positions that were not filled and no longer can be supported in light of a “massive reduction in resources.” The government, he added, “is considering the implementation of a Reduction in Force that will carry over into the new fiscal year.”
In his memo, the OMP director asked department and activity heads to review all staffing under their authority, and the related staffing costs such as wages and benefits, and determine which positions must be terminated or furloughed to effect the required reduction.
He asked them to have this listing ready for delivery to the governor’s office by Wednesday, April 8. “The governor acknowledges that this will be a difficult task and suggests that you address it by position and not by the individual occupying the position,” Seman said. “You, as the department or activity head, must determine which functions of your organization can be eliminated or combined during this crisis period and the minimum number of staff that must be retained to effect the retained functions in the most cost-efficient manner. The governor emphasized that this is not the occasion to make retention decisions based on family or friendship, but on the needs and best interests of the government, based on performance and service.”
In a statement on Tuesday, Press Secretary Kevin Bautista said:
“This is a very, very difficult spot for our government to be in. Our government is working diligently through the CNMI Department of Labor to get official confirmation on the eligibility of our government employees to be on Pandemic Unemployment Assistance. This government is working very hard to take care of its employees that will be getting furloughed and terminated as a result of the lack of economic activity in the CNMI and the lack of funding that is in our government coffers.
“As with the rest of the world suffering from the global pandemic, the CNMI government is at an unprecedented level that it has never seen before.
“Fiscal Year 2020 started off really positive, with some strong collections in the first quarter of the fiscal year. We were looking to make 2020 a strong year for the Commonwealth, even as we continue to recover from Super Typhoon Yutu. Tourism steadily rebounded in the first month in the first quarter with things looking really positive for the CNMI to get back to a level before Yutu.
“Then as the Covid-19 outbreak started in late 2019, Governor Torres took proactive steps to stop China flights in January. But as this pandemic worsened to where we are today, the government has made difficult decisions, from closing down CNMI tourism in the interest of public health.
“Our economy is at a standstill, at a very unprecedented level that we have never seen before in the history of the CNMI, in the history of this country, where the economy in states and territories have essentially stopped because social distancing is the only factor that we can control in combating this pandemic as we continue to wait for vaccines and medical treatment for Covid-19.
“With no economy, and with the reserves used to pay the upfront costs to expedite the CNMI recovery after Super Typhoon Yutu, our government is working very hard to keep services up.
“Out of all 55 state and territorial governments, the CNMI is the only territorial government in the country that is making furloughs and cuts in the manner that the local government is doing, reducing the overall government personnel costs by 50%.
“No other state or territorial government is doing that. 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.
“Under Governor Torres' leadership, this government will continue to work hard to protect the public health and well-being of every person. We will continue to pursue assistance for all furloughed government employees and private sector employees. We're in this together, and we need to continue to work together to overcome this virus.”

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