SAIPAN (MARIANAS VARIETY) — With reimbursements from the U.S federal government, the Commonwealth has been slowly paying down its debts, Finance Secretary David DLG Atalig told the House Ways and Means Committee on Tuesday.
He said in the first quarter of fiscal year 2021, the CNMI government paid US$700,000 for a 2007 general obligation bond. The Commonwealth is obligated to pay US$7 million annually for the bond. Next month, Atalig said the administration expects to make an additional payment of US$2.9 million for the bond.
He said the government is also required to remit US$40 million annually to the CNMI Settlement Fund to pay 75 percent of the retirees’ pension.
Atalig said in the first quarter of the fiscal year, the government paid about US$6 million to the Settlement Fund.
The government will pay another US$14 million in the second quarter, US$8 million in the third quarter, and US$12 million in the fourth quarter to meet the US$40 million obligation to the Settlement Fund this year.
For the 25 percent of the retirees’ benefits, which the government is not obligated to pay, Atalig said the administration remains “committed to ensuring that the retirees get their full pension, and has been making payments” for the 25%, which amounts to about US$1.2 million a month or over US$14 million annually.
He noted that at the moment, the CNMI government has not been collecting casino business gross revenue taxes “for obvious reasons” so the administration has been utilising the general fund to ensure payments to the retirees’ 25 percent.
The government’s primary revenue source for pension payments were the taxes paid by Imperial Pacific International whose Saipan casino has shut down since March last year due to the Covid-19 pandemic.
Asked by Representative Tina Sablan if the source of funds for the payments made to the Settlement Fund were the amounts reprogrammed from the government’s different business units in the general fund allocations, Atalig said, yes.
As for the US$15 million loan from the Marianas Public Land Trust, the Finance secretary said it is being paid with the annual interests due to the CNMI government….PACNEWS