SAIPAN – Gov. Ralph Torres told a U.S. Senate committee that despite the grave challenges faced by the Commonwealth of the Northern Mariana Islands, “we will overcome (them) and I pray that our people will remain strong, resilient, and healthy throughout these trials.”
Chaired by U.S. Sen. Lisa Murkowski, R-Alaska, the Senate Committee on Energy and Natural Resources invited the governor to submit his written testimony on the impact of COVID-19 in the CNMI.
In his testimony, the governor said the “dramatic fiscal shortfall resulting from the elimination of the CNMI’s sole industry will have deep and lasting impact on the lives of our people for years to come.”
The Pandemic Unemployment Assistance and the Federal Pandemic Unemployment Compensation programs, as well as Economic Impact Payment support mitigated some of the suffering in the CNMI, he said, adding “the path ahead is still presenting cause for serious concern.”
The governor said the CNMI, like many states in the nation, “is in dire need of direct financial support to alleviate the deep budget shortfalls that have complicated the administration of necessary public services such as public safety and social services.”
The relief to state and territorial budgets provided through the Coronavirus Aid, Relief and Economic Security, or CARES Act “supported the large and unappropriated obligations required of the commonwealth to respond to the urgent health care needs of the population, but much is needed … to retain viability of government operations,” Torres said.
The governor said, as a result of the COVID-19 pandemic, the CNMI budget was cut in half due to the loss of resources.
“With no certain end to this pandemic in sight, the future for the CNMI’s tourism industry, and government income derived from this economic activity is bleak,” the governor said.
“Additionally, critical components that would have otherwise aided in this effort to support government services were not made available to the territories under the CARES Act.”
He cited in particular the Municipal Liquidity Facility created by the CARES Act, which would “allow the issuance of municipal debt … to cover, among other things, the reductions of tax and other revenues related to or resulting from the COVID-19 pandemic.”
The governor said this program has been deemed inaccessible to territorial governments. The lack of access to such financial tools greatly impacts the ability of a territorial government to finance necessary obligations in the environment of severely limited revenues, he added.
“We have showcased our commitment to downsizing government operations through furloughs and deep austerity measures; however, we can only cut so much before the residents of our community will further experience disproportionately the impacts of this crisis in levels unseen in communities in the mainland U.S.,” he said.
The governor said the largest and most concerning obligation of the CNMI is the settlement agreement with the District Court pertaining to the pension program.
The federally created Settlement Fund requires mandatory minimum payments to ensure continued benefits for the island's government retirees.
This year, the $44 million obligation to the Settlement Fund is the largest single item of the Commonwealth budget.