ARPA presentation

The Crowne Plaza Resort Hibiscus Hall was packed with officials led by Gov. Ralph DLG Torres on Friday for the administration’s presentation of its ARPA expenditure plan.

THE Torres-Palacios administration on Friday presented the CNMI expenditure plan for the American Rescue Plan Act, or ARPA, to members of the 22nd Legislature, the judicial branch, executive departments, mayors, municipal councils, autonomous agencies, and independent government entities.

In his opening remarks, the master of ceremonies, Press Secretary Kevin Bautista, acknowledged a multitude of distinguished guests who were present for the presentation at Crowne Plaza Resort in Garapan.

“It’s always special when we have all three branches of government, autonomous agencies, independent government entities in the same place with one common goal: coming together in a true whole-of-government approach to lead in providing solutions for our recovery of these beautiful islands we call home,” he said.

Governor Ralph DLG Torres, for his part, said the CNMI has been disproportionately affected by the pandemic, but has received a significant amount of federal assistance through the Community Development Block Grant Disaster Recovery Program, the Federal Emergency Management Agency’s Public Assistance program, and the ARPA.

“We all know the issues facing the CNMI. The challenges the Commonwealth has faced for decades do not have different solutions based on ideology,” he said.

The governor said the CNMI needs better infrastructure; more funding for schools; more funding for the judicial system; to meet its obligations and constitutional mandate to pay the deficit; be true partners of the private sector; and invest in its healthcare system.

Moreover, he said, the CNMI will restore within-grade increases to employees to support their professional growth and development; prioritize local funding to support full pension benefits for retirees; and provide greater access to quality homes for the planned establishment of 2,000 new homestead lots.

“We have placed our commitment to these priority areas to resolve long-standing issues that have been [exacerbated] by the pandemic. This monumental undertaking will require all of us to join in the process of sharing ideas, seeking new and innovative solutions, and working together to ensure these solutions work for the people of the CNMI,” he said.

The administration will submit a revised budget to the Legislature by July to bring the CNMI government back to its pre-Covid-19 budget level.

Expenditure plan

In the presentation, Finance Secretary David DLG Atalig gave a breakdown of the ARPA allocations for the U.S. states and territories.

ARPA allocates $204.1 million for oversight for various Offices of Inspectors General, Government Accountability Office, and Pandemic Response Accountability Committee; $16.9 billion for veterans affairs; $360 billion for state and local aid; $430.8 billion for direct payments; $5.2 billion for food and farming; $244.1 billion for labor and unemployment; $171.9 billion for schools; $67 billion for small businesses; $159.1 billion for healthcare; $40 billion for housing; $58.3 billion for transportation; and $53.7 billion for recovery support.

Of the $360 billion allocated for state and local aid, $219.8 billion is for the Coronavirus State Fiscal Recovery Fund; $130.2 billion for the Coronavirus Local Fiscal Recovery Fund; and $10 billion for Coronavirus Capital Projects Fund.

Of the $4.5 billion allocated to the five U.S. territories, 50% was allocated equally and the other 50% was allocated by population.

Each territory is receiving an equal share of $450 million of the $2.25 billion. The other half of the allocations provided the CNMI with $31.87 million.

Altogether, the CNMI has received $481.87 million in ARPA funding.

Based on federal guidelines, this funding cannot be used to offset a reduction in net tax revenue due to a change in law from March 3, 2021 through the last day of the fiscal year in which the funds provided have been spent.

Furthermore, the funds cannot be used to make a deposit to a pension fund.

It can, however, be used for four categories:

• $100 million to respond to the pandemic or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries, such as tourism, travel, and hospitality;

• $30 million to respond to workers performing essential work during the pandemic by providing premium pay to essential workers and employers;

• $250 million to provide government services to the extent of reduction of revenue due to the pandemic relative to revenues collected in the most recent full fiscal year;

• $101.8 million to make necessary investments in water, sewer, or broadband infrastructure.

Of the $100 million allocated for the first category, 10% will go to nonprofits, 10% to small businesses, 31% to households, and 49% to tourism, travel, and hospitality.

This amounts to $10 million for nonprofits, $10 million for small businesses, $31 million for households, and $49 million for tourism, travel, and hospitality for the two fiscal years, combined.

By fiscal year distribution, 40% of the $100 million is for FY 2021 60% is for FY 2022.

Of the $30 million for the second category, $6 million and $24 million for will be allocated for FY 2021 and FY 2022, respectively. Eligible essential workers of the state performing essential work during the Covid-19 public health emergency will receive 85% or $25.5 million in premium pay while 15% or $4.5 million will be allocated to private company grants for essential workers. 

Of the $250 million allocated for the third category, 20% will go towards restoring reduction of hours and reinstating furloughs affected by the loss of government revenues; 38% for the provision of government services, operations, and activities; 5% to the judicial branch; 3% to the legislative branch; 8% for government utilities; 3% for educational institutions; 16% for Medicaid; and 8% for medical care abroad not available in the CNMI.

The $250 million will be distributed as follows: $93.8 million to recover government services’ lost revenue, $48.7 million for restoration of hours, $39.7 million for Medicaid, $20.2 million for medical referral, $7.6 million for education, $20 million for utilities, $13.1 million for the judicial branch, and $6.7 million for the legislative branch.

Seventy-five million dollars will be set aside for FY 2021 and $175 million will go towards FY 2022.

Of the roughly $101.8 million for the fourth category, 20% will go towards land compensation, 11% for broadband, 20% for water systems, 1% for Northern Islands water systems, 10% for E-Gov or cybersecurity, and 37% for sewer systems. These amount to $20.1 million for land compensation, $11 million for broadband, $22 million for water systems, $1 million for Northern Islands water systems, $10 million for E-Gov or cybersecurity, and $37.7 million for sewer systems.

Fiscal year 2021 will have $20.3 million while FY 2022 will get $81.5 million.

Additionally, $5.4 million has been appropriated for senatorial districts or local fiscal recovery, as well as $10.4 million for Saipan, Tinian, and Rota.

Under the Capital Projects Fund, $14.2 million has been appropriated for the CNMI.

In summary, Saipan will receive roughly $22.8 million of the ARPA funding, Tinian $11.3 million, Rota $8.6 million, the Northern Islands $2 million, and the CNMI central government $467.2 million.

Altogether, $141.3 million will be spent for FY 2021, and $340.5 million for FY 2022.

In his closing remarks, Lt. Gov. Arnold I. Palacios said, “Our intention for today’s presentation was to give you details on how your government will be investing the funds from the ARPA in our islands, but also to provide you the vision of where our Commonwealth can be following this global pandemic.”

He added, “This is our moment. I have been around long enough to know of the difficulties our islands face in providing the best possible opportunities for our people. We have been given the chance to recover and thrive in the post-pandemic world, and this is not something any of us here today are going to miss.”

“You elected us to provide you and your families a better life here at home,” he said, “and we will continue to do the work to make that happen.... We need to continue to talk, identify needs, and fill the potholes on our road to recovery together, so let’s do that. Bring your thoughts [and] concerns to us, but do right by the people we all serve and bring your solutions as well. We can make this period in our history truly transformational, so let’s give it our best shot.... Let’s do this together.”

Reporter

K-Andrea is a Gates Millennium Scholar who earned her bachelor of arts degree in political science from St. Francis College in Brooklyn, NY. Since joining the MV team in Feb. 2020, she has been covering the political, environmental, and community beats.

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