THE Commonwealth government must find a new source of funding to pay $14.4 million for the 25% of the retirees' pension benefits in fiscal year 2022, Department of Finance Secretary David DLG Atalig said.
Finance recently remitted to the Settlement Fund $40 million in annual payment for 75% of the retirees' benefits, and $558,676.52 biweekly payment for 25% of the benefits. The government was able to pay the 25% using the Community Disaster Loan proceeds the CNMI received from the Federal Emergency Management Agency.
Before the end of FY 2022, which started on Oct. 1, 2021, Atalig said the CNMI government must remit $39 million to the Settlement Fund for 75% of the retirees' benefits.
He said the funding source for the 75% is the CNMI general fund because that is the obligation of the CNMI government under the settlement agreement approved by the federal court.
“The question really is how to pay the retirees' 25% for the new fiscal year,” he added.
The previous source of funds to pay the 25% was the business gross revenue tax from Imperial Pacific International whose casino shut down in March 2020 amid the Covid-19 pandemic.
The casino is unlikely to reopen anytime soon due to several lawsuits filed against IPI, which is also facing the revocation of its exclusive license.
Atalig said for the 25% of the retirees’ pension benefits, the CNMI government needs to pay roughly $1.2 million per month for a total of $14.4 million for the entire FY 2022.
Without the revenue provided by the Saipan casino, he said, "the Legislature needs to find an alternative source of funding or else, we will not be able to provide for the 25%.”
According to the NMI Settlement Fund, “The 25% benefit payment and bonus payment are voluntary payments from the [CNMI] Government, and are not required under the Settlement Agreement.”
Atalig said right now, the administration has been working hard to revive the tourism industry and identify other possible industries including fishing and agriculture.
For his part, House Minority Leader Angel Demapan said, “We all know that is a challenge for the next fiscal year, so part of our responsibility for this fiscal year is to invest excess funds that are coming in to rebuild our economy, to make sure that we have additional resources.”
He said in the current fiscal year, the CNMI government should ensure that American Rescue Plan Act funds are used “to spread out assistance and support economic growth.”