Thursday, December 13, 2007

Fitial says feds applying ‘socialism’ to NMI

Friday December 14, 2007 By Gemma Q. Casas Variety News Staff

GOVERNOR Benigno R. Fitial says the United States, known as the land of the free and opportunities, seems to be applying “socialism” to the Northern Marianas at the expense of its indigenous people.
He made the statement in the wake of the U.S. House of Representatives’ move to pass legislation ending the CNMI governor’s control over local immigration.
“This bill would impose a federal labor system on the commonwealth which is nothing more, or less, than an effort to enforce a ‘command economy’ system on the Northern Marianas. In another day, it would be called socialism,” said the governor in a statement.
“It entrusts to government officials the responsibility for allocating laborers to particular industries and, within industries, to particular companies. These economic decisions should not be made — and cannot be made effectively — by government officials,” he added.
The U.S., a melting pot of people from different ethnic backgrounds, prospered because of its open market policy, said the governor.
“The United States economy has prospered because of our reliance on a market economy – and the forces of supply and demand. I regret that the members of the U.S. House committee rejected these basic principles,” he said.
He urged the U.S. Senate to wait for the results of the General Accountability Office’s economic study, which is expected to be released in May 2008, before acting on H.R. 3079.
The U.S. Department of the Interior separately funded an economic study on the CNMI. The report prepared by the Saipan-based financial firm Burger & Comer is due to be released next month.
The governor said federalizing the islands’ immigration system may further destabilize its tourism-based economy.
“Economic experts and business leaders say the number one tool for revitalizing our economy is retaining this particular competitive advantage. Local control over immigration has enabled us to develop new sources for our tourism business,” he said.
“It gives us the needed flexibility for new investment for educational institutions, new hotels or resorts. This legislation would take that authority away from us, and threaten thousands of jobs and billions of dollars in potential new investment,” he added.

Friday, December 7, 2007

Cohen says cost of living on islands high due to limited private sector participation

mv- 120707

THE federal official in charge of overseeing assistance and programs for American insular areas says the cost of living in island communities is high due to limited private sector participation.
David Cohen, the U.S. Interior Department’s deputy assistant secretary for insular affairs, was the keynote speaker at the Annual Conference of the Island Government Finance Officers’ Association held on Tuesday in Honolulu, Hawaii.
He said “in most of the insular area economies, there is an unsustainable imbalance between the public and private sectors.”
A strong private sector propels a healthy economy, he said. This way “jobs are created and taxes are collected to fund essential services for the public.”
But many islands do not have economies dominated by the private sector. “In many island economies, this model is turned on its head: The economy is dominated by the public sector. Since the public sector generally is a consumer and not a producer of wealth, this type of economy can only be sustained with outside subsidies. I have referred to these island economies as being “upside down in the middle of the ocean.” They will have to get right-side up in order to get their heads above water,” said Cohen.
However, the odds are against the island communities because of their remote locations and susceptibility to extreme weather conditions. “These communities tend to have small populations, few resources and remote locations. That means they are heavily dependent upon transportation systems to bring people and goods to and from their islands, and that transportation is likely to be significantly more expensive than it is in more populated areas. This, in turn, tends to make everything else on the island more expensive. The cost of doing business is therefore high.”

Sunday, November 25, 2007

Legalize it

MV-Friday November 2, 2007

SAIPAN’S downtrend economy is alarming — immediate exodus of garment industry; emigration is rampant; tourism is dying; businesses continue to shut down; cost of utilities soars and crime rate escalates.
The urgent solution is: legalize casino.
Yes, casino is the window of economic opportunities for Saipan.
Yes, the casino initiative is geared toward improving living standards — for a rebirth of tourism, an infusion of investments, an increase in tax revenues for government projects, lower cost of utilities, and a reduced crime rate.
Please vote “YES” to casino.
Susupe, Saipan

Most NMI economic indicators down

mv-Monday November 26, 2007 By Haidee V. Eugenio Variety Assistant Editor

EXCEPT for a 0.3 percent increase in hotel room rates and a 96 percent increase in the value of construction projects, all other major CNMI economic indicators — from business gross revenues to remittances, banking, automotive sales and general fund revenue — went down during the third quarter of 2007 compared to the same period last year.
The CNMI’s two major industries – garments and tourism – were down by 43 percent and 12 percent.
Garment exports reached only $71.62 million between July and September, compared to $126 million last year due to garment factory closures and a decline in orders from the U.S.
Tourist arrivals totaled only 99,629 in the third quarter this year compared to 113,540 last year.
Department of Commerce Secretary James A. Santos said the quarterly economic indicators “depict the social and economic conditions of the CNMI” in July to September.
Commerce compiles the data from government and private agencies included in the quarterly economic indicators report.
The CNMI business gross revenue dropped by 14 percent — from $457.8 million to $393 million in the third quarter.
General fund revenue or government collections from taxes and fees reached only $44.25 million in the third quarter, a 21 percent drop from last year’s $56.06 million. Government expenditures likewise dropped by 22 percent to $40.2 million.
Remittances also dropped by 13 percent, from $25.1 million last year to $21.9 million in this year’s third quarter.
Automotive sales declined by 14 percent to 288 in the third quarter.
As for banking activities, banks reported a 3 percent drop in total deposits — from $530.40 million to $514.26, and an 8 percent drop in total loans, from $182.7 million to $167.58 million. The loan-to-deposit ratio stood at 32.6 percent in this year’s third quarter compared to a year ago at 34.4 percent.
The average hotel occupancy rate stood at only 57.3 percent between July and September compared to 65 percent a year ago.
However, the average hotel daily room rate went up by 0.3 percent in the third quarter to $97.32 compared to $97 last year.
The CNMI imported only 113.66 tons of petroleum, oil, lubricants, food items, cement and other items, lower by 16 percent compared to last year’s 134.80 tons.
The number of phone lines dropped by 6 percent, from 30,945 to 29,166.
The government issued 56 building permits for commercial and residential construction projects valued at $4.5 million between July and September, an increase from the $2.29 million in construction projects a year ago.
The Department of Labor failed again to report the number of work permits issued by industry during the third quarter. It also failed to provide second-quarter data.
Last week, Commerce reported record-high prices of basic consumer goods in the third quarter of 2007 at 113.8 index points, mainly due to higher costs of food and utilities as a result of fuel price increases.

Sunday, November 11, 2007

'Walking papers' issued to nearly 400 govt workers

Sunday November 11, 2007
Local ST-Monday, November 12, 2007

By Agnes E. DonatoReporter

The Fitial administration has begun issuing walking papers to nearly 400 workers who were granted partial term contracts because of lack of funding.An employee at the Governor’s Office, who asked not to be named, said he received notice on Wednesday that, as stated in his contract, Dec. 21 would be his last day of work. He is saddened by the news, but remains hopeful something can happen before then.Press secretary Charles P. Reyes Jr. confirmed that the Executive Branch had begun sending out notices. He maintained that the employment contracts do not require this, but the government is doing this to prevent any possible legal problems.The reduced employment term apply to contractual positions, and include 111 jobs on Rota, 129 on Tinian, 47 on Saipan, and 67 within the Governor’s Office. The layoff is part of the governor’s FY2008 budget plan, which remains pending in the Legislature.“We were hoping the Legislature would help us save some of these jobs. Regrettably, we we have not been able to get consensus with the Legislature on the budget, as well as cost cutting measures like the unpaid holidays and reduced retirement contribution,” said Reyes.The Fitial administration also issued furlough notices to employees last year, but many were recalled after the Legislature passed cost-cutting measures like the austerity Fridays law.The planned layoff results from the governor’s decision to raise the funding level for “prioritized activities” such as public health, public safety, education, revenue collection, labor, judiciary and law enforcement, tourism promotion, public works, parks and grounds, and zoning.Under the governor’s proposal, these activities will take up 80 percent of the government’s total budget of $161.585 million. This is an increase of 5.96 percent, or $7.2 million, compared to FY2007.“Unfortunately, this commitment to prioritized activities funding will translate into a budget cut of $8.98 million to other activities in comparison to FY07 funding level. As an unavoidable result, we are not faced with only being able to fund 397 currently filled excepted service [full time] positions from Oct 1 to Dec 22, 2007,” Fitial told the Legislature.Meanwhile, the administration proposes to fill 267 vacancies in government. Antonio Muna, the governor’s special assistant for management and budget, said these vacancies include mostly essential positions such as police officers, attorneys, investigators, and medical professionals, and very few support staff.Muna said those among the 397 who qualify for these vacancies will be given priority in hiring.The rest will have no choice but to seek jobs with the federal government, the private sector, or elsewhere.

Bill raises pay for govt executives

Local ST-Monday, November 12, 2007 By Agnes E. DonatoReporter

Government executives will get a pay increase under a bill now before the Legislature.House Speaker Oscar M. Babauta has introduced legislation that would restore to 1998-2006 levels the salary ceilings for certain appointed officials and raise the salaries of the Public Health secretary and the attorney general.Babauta said the salary caps must be updated “in order to attract and retain qualified and dedicated managers to serve the needs of the Commonwealth.”If enacted, the bill would benefit department heads, deputy department heads, resident department heads, and division chiefs or special assistants. The bill would apply to salaries paid beginning Oct. 1, 2006.Under the government compensation act passed in 1991, maximum salaries were set for department heads ($54,000 or $48,000), deputy department heads ($42,000), resident department heads ($36,000), and division chiefs or special assistants ($40,800).Between Oct 1, 1998 and Oct. 1, 2006, annual salary ceilings were applied to equalize the department heads ($54,000), and raise the pay of deputy department heads ($50,000), resident department heads ($45,000), and division chiefs or special assistants ($45,000). The increase were set forth in appropriation acts during the period.However, the FY2007 budget did not include similar provisions. As a result, the salary ceilings for such officials reverted to 1991 levels for the first time in eight years.Babauta’s bill intends to restore the salary caps to pre-2007 levels. It also seeks to increase the salary ceilings for attorney general to $80,000, and for the secretary of Public Health to $70,000, or $100,000 if the secretary holds a doctor’s degree.The public auditor may receive up to $100,000 a year, and the public defender $70,000.Notwithstanding the caps, a department secretary or activity head who holds a doctor’s degree, an MBA degree, or is a U.S. certified public accountant may get up to $80,000 a year.Despite the $45,000 cap for their category, the special assistants for administration and for budget and management may get $54,000. The same cap will apply to the senior policy adviser. Legal counsels to the governor and lt. governor may get an annual salary of $70,000.Babauta said that the government could save on personnel turnover costs by providing attractive salaries to managers and policy makers.


Local st-Monday, November 12, 2007 By Agnes E. DonatoReporter

Gov. Benigno R. Fitial has brought to the attention of Interior Secretary Dirk Kempthorne his feud with federal officials over the CNMI labor and immigration initiative grants. In a letter dated Nov. 7, Fitial told Kempthorne that he had declined the $420,000 grant because of unnecessary and unreasonable conditions which Deputy Assistant Secretary David B. Cohen and Federal Ombudsman Jim Benedetto seek to impose on the CNMI. He asked Kempthorne to stop what he claims was an attempt by Cohen and Benedetto at micromanaging local government affairs.“It is unprecedented, unnecessary, and unproductive. We see no reason why the initiative grant of federal funds cannot be made on the very same basis that it has been in the past,” Fitial said.Under the new terms of the federal grant, the CNMI government must consult with OIA officials before filling any position at the Department of Labor and at the Office of the Attorney General. Positions funded by the funds should be exempt from travel and hiring freezes, local government austerity holidays, and other cost-saving measures. If the CNMI government terminates any federally funded position or employee, it could lose the remaining funds for that position.Furthermore, personnel funding will depend on the AGO and DOL's compliance with their respective memoranda of agreement with the Federal Ombudsman's Office.“Mr. Cohen and Mr. Benedetto seek to impose these conditions simply because they have the power to do so. The word 'restraint' is simply not in their vocabularies,” Fitial said.The governor outlined his reasons for opposing the new conditions. He said the provision to exempt federally funded positions from hiring and travel freezes was “a cavalier dismissal of our cost-cutting measures,” and could be damaging to employee morale.Fitial said the consultation requirement for personnel hiring would “authorize OIA officials to decide what positions are 'critical' and which are not, and thereby justify the withholding of funds at any time Cohen or Benedetto seeks to enforce their definition of 'critical.””He added that the administration had done well in filling positions at Labor and Immigration with effective, responsible people. There is no reason OIA should demand to have the final say on hiring now.He also said the provision that prohibits termination of grant-funded employees was “just silly. As pointed above, we have made good personnel decisions and this overreaching by Mr. Cohen and Mr. Benedetto is unjustified and insulting.”As for the MOA provisions, Fitial said they would only serve to enhance Benedetto's limited authority from the U.S. Congress.Cohen previously said there is no reason the CNMI government should forfeit the $420,000 grant, as well as possible addition of $500,000, simply because the U.S. Office of Insular Affairs is taking steps to ensure that U.S. taxpayer funds are properly spent.“Our CNMI Initiative grants are not and never have been a blank check to the CNMI government. These are U.S. taxpayer funds, and my office has a duty to ensure that the funds are allocated effectively to address important needs in labor and immigration,” Cohen said. Benedetto has also explained the conditions were intended “to ensure that critical needs personnel are on the job, addressing the issues the Labor, Immigration & Law Enforcement Initiative was intended to address, without being affected by hiring freezes, travel bans, or austerity holidays.He added that the consultation provision may be satisfied by the CNMI's providing a resume for the person hired. The provision is not intended to give OIA veto power over hiring decisions, nor does it require prior approval by OIA of any candidate selected by the CNMI government to fill a position.