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NMI incurs over $90M revenue loss

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THE Senate Fiscal Affairs Committee met with Secretary of Finance David DLG Atalig on Wednesday to discuss House Joint Resolution 21-9-House Draft 1, which seeks to grant the governor’s authorized representative, or GAR, Patrick Guerrero authority to enter, on behalf of the CNMI, into a Federal Emergency Management Agency Community Disaster Loan agreement.

Atalig reported that the Commonwealth currently has lost approximately $93 million in revenue since the Super Typhoon Yutu disaster in Oct. 2018.

He said his department has been working diligently to provide partial payments to the vendors who provided services during the post-Yutu recovery efforts, but added that the CNMI currently does not have the funds to pay these obligations in full.

 

Secretary of Finance David DLG Atalig, back to the camera, testifies before the Senate Fiscal Affairs Committee on Wednesday in the Senate chamber. Photo by K-Andrea Evarose S. Limol

He said the FEMA CDL program could provide up to $5 million in assistance, and repayment would not begin until five years into the program with a .097% interest rate.

As for the rest of the CNMI shortfall, he said they are hoping to secure funds approved by the U.S. Congress and President Donald J. Trump.

“Our good Congressman Kilili has informed us that the soonest that he can feel confident in getting that authorization would not be until October of this year,” Atalig said.

He said he was also informed by the Office of the Attorney General that the Legislature must pass a bill and not just a joint resolution to authorize a FEMA loan application.

Sen. Sixto K. Igisomar said, “At the end of the day, I will need a very detailed accounting of the CNMI government with respect to revenues, expenses, debts, and future obligations, inclusive of all those that are in court or running in court… This resolution is asking us to jump on board to secure this loan without actually knowing whether we know what we’re going to do with the money.”

He added, “We need a complete assessment of CNMI revenues, expenses, and debts. The House and the Senate must be very, very clear on what the checkbook looks like. All we’ve seen [from] all of the disasters that have come to the CNMI [are] expenditures that are not reimbursed. I really want to hone down onto the details. I do hear that we have issues with our problems. I want to know why.”

He said the CNMI is facing a “serious deficit — I’m pledging that I will not support anything that will allow us to spend money without actually knowing everything that [we are spending it on].”

Atalig said the $5 million from FEMA CDL would go towards paying off as many obligations as possible, including vendors that still have not been paid in full for services rendered during the post-Yutu recovery efforts.

The committee mentioned Article X, Section IV of the CNMI Constitution, which states that “public indebtedness other than bonds or other obligations of the government payable solely from the revenues derived from a public improvement or undertaking may not be authorized in excess of ten percent of the aggregate assessed valuation of the real property within the Commonwealth. Public indebtedness may not be authorized for operating expenses of the Commonwealth government or its political subdivisions.”

Committee members encouraged the Finance secretary to be especially mindful of public indebtedness limitations.

HJR 21-9, HD1 will be further discussed by both houses of the Legislature, taking note of the comments from Atalig.

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