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The following is a column written by Saipan Senator Celina Babauta:
According to the administration’s recent press conference on the budget, including members of the legislature, two austerity scenarios were presented. One proposes a 16-hour cut, the other a 25-hour cut “across the board.”
Here’s the problem: one scenario is built on Raf Maff’s school of creative accounting. They assume and include a yet-unapproved $29 million loan from MPLT as revenue in the proposed budget. That’s not only improper—it’s fantasy budgeting. You cannot plug in money that doesn’t exist.
What’s really happening with MPLT:
Even though the Administration signed off on an MPLT loan bill, that signature alone does nothing. MPLT does not have to give a loan. In fact, to protect our funds and investments, MPLT is instead proposing a completely different financial mechanism —a “margin account”—for the $29M.
MPLT is asking the legislature to pass a separate bill authorizing them to establish a “margin account” in order for this $29M to even be considered. A margin account is essentially like putting your savings up as collateral against a loan while it continues to gain interest—you can’t touch your savings while the loan is outstanding, and every repayment frees up a little of your savings at a time. MPLT is clear: they will not issue direct loans because doing so drains the corpus (our savings) and undermines their constitutional duty to invest, not to lend. That is why legislative authorization is always required.
We’ve been here before. The FY 2025 budget originally counted on a construction tax before it was even law. The Senate shot it down, rightly saying, “we can’t count our chickens before they hatch.” Only after the tax bill was actually passed was the budget amended. Even then, the tax failed to generate anywhere near the revenue projected.
Yet here we are again—changing the rules when it’s convenient.
Meanwhile, OIA has offered up to $9M in bailout funds—but with many strings attached. They will not release anything until the CNMI government shows real good faith in implementing cost-cutting measures, including possible RIFs. That’s a clear sign of mistrust in our government. And who can blame them? After the last decade of mismanagement—no audits under Torres, grants misused to ship personal vehicles, millions of ARPA funds funneled to phantom businesses, bloated hiring and salary increases on temporary COVID funds—the mistrust is well earned.
I have tried to be the voice of reason and logic - always pushing for solutions that put our people first and always representing their interest:
Speaking against back pay for casino commissioners who aren’t government employees - ($250,000)
Speaking out against special interest bills
Asking the AG to recover unauthorized cabinet overtime ($1,400,000)
Selling our tax receivables so we can clean up our books (factoring - $126,000,000)
Suing Marianas Southern Air to return our planes to build up our domestic air traffic ($8,000,000)
Focusing on solutions (gains):
Introducing bills to establish a captive insurance industry (potentially $16,000,000 per year)
Marketing our tariff-free status abroad to attract investment (potentially millions by leveraging Jones Act waiver and actually building our export side of the economic equation)
Advocating with DOD officials for CNMI infrastructure support - AMC gateway designation (millions in infrastructure support for airport and seaport as well as job creation for local workforce)
Leading efforts to create the CNMI National Guard for jobs and security (conservatively, $280,000,000 in initial investment plus job creation and skilled workforce buildup)
Scholarships for graduating seniors through the Core Tech Foundation ($25,000 per year)
Many other intiatives
But the ruling party has stacked the legislature with loyalists, crippling its constitutional obligation to provide checks and balances.
The truth is simple: we cannot build our future on fantasy budgets and the government needs to learn how to live and die by a real budget.
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