Embedded Files
09/23/2025 - Standing shoulder to shoulder with Gov. David M. Apatang and Lt. Gov. Dennis C. Mendiola, CNMI Delegate Kimberlyn King-Hinds did not sugarcoat the message: the Commonwealth is in fiscal depression, and "the house is on fire."
What began as a routine 902 consultation in Washington, D.C. quickly turned into an urgent discussion on how the federal government could help prevent the CNMI from going under.
"In our conversations in Washington, D.C., it was made very clear that the CNMI is, I guess for lack of a better word, our finances are, we are in a severe budget crisis," King-Hinds said at a Sept. 22 press conference at the Governor’s Office on Capitol Hill.
“There is commitment from the federal government, the Interior and the White House to assist with the first quarter ask. But that commitment comes with conditions. And the condition basically is that the CNMI government acts like the house is on fire by implementing some reforms,” she said.
King-Hinds said the Department of Interior is prepared to extend assistance on a quarter-by-quarter basis by reprogramming funds already earmarked for the CNMI. But new infusions will only come after the local government demonstrates good faith by cutting costs and securing the controversial $29.1-million loan from the Marianas Public Land Trust.
" I know that there's a lot of push back with regards to getting the MPLT loan, but the numbers that were crunched assumes that the CNMI government exhausts all remedies."
Among the most sensitive discussions, she revealed, is the possibility of extending the U.S. Department of Defense lease on two-thirds of Tinian.
“One of the topics of consideration is extending the Tinian military lease area. I don't know what that's going to look like, but that's also on the table. There are other options at the table that are being explored and are being looked at.”
Ultimately, she said it’s for the people of Tinian to decide with regards to the military lease, especially the leadership of the island, where she hails from.
Finance Secretary Tracy Norita delivered the sobering numbers. The fiscal year 2026 revenue forecast, originally $179 million, has been revised down to $156.7 million due to a steep downturn in tourism.
The Marianas Visitors Authority had once projected a rebound, but with suspended flights and waning demand, arrivals are now expected to total just 129,000 visitors—a 22% drop from earlier estimates.
Even with the MPLT loan, Norita said government workers face reduced hours—64 hours biweekly under the optimistic scenario, 55 hours without it.
Apatang did not mince words. "We don't have the money," he said. "We need to cut down where we know we can to survive."
Norita further outlined the austerity measures now on the table:
Immediate reduction in work hours, furloughs, and possible reduction-in-force
Hiring freeze except for critical law enforcement positions
Suspension of overtime, premium pay, and typhoon double-time
Freeze on government travel, regardless of funding source
Stricter tax enforcement and potential unpaid holidays
Exploring a memorandum with Guam to house nonviolent inmates
Seeking judicial relief from retiree group health and life benefits
Meanwhile, medium- and long-term reforms to help the CNMI out of the economic morass include new internet sales and excise taxes, amendments to casino and construction tax laws, merging duplicative agencies, and creating a rainy-day fund.
Under the revised budget, the Public School System faces a potential cut. One scenario allocates $40 million factoring in the MPLT loan; another reduces that to $32.6 million—still technically following the 25% constitutional minimum.
Retirees, meanwhile, could lose their 25% pension allotment entirely.
Senate President Karl King-Nabor said regardless whether the Legislature found out about the CNMI government’s dire fiscal condition last month or just today, the focus is on Sept. 22 and assured that the Senate will be in lock-step with the executive branch in instituting measures it needs to stem the economic crisis.
Rep. Blas Jonathan Attao, speaking for the House of Representatives, said everyone tried to implement the plans in the Economic Summit some five years ago, especially after the CNMI was given an infusion of $500 million in American Rescue Plan Act funding, which eventually became a double-edged sword.
During the press conference's open-floor session, reporters pressed leaders on whether austerity had been lifted too soon last year. Norita responded that conditions changed rapidly after initial signs of recovery, citing the Jeju Air crash and a wave of flight cancellations that followed.
One question asked why the CNMI couldn't simply run a deficit like the U.S. federal government. Apatang shot back: “The important thing is that we can only spend what we have. We don't want to continue to spend money and we cannot pay our vendors and all that. We want to make sure that what we have is what we have. We don't want to overcommit ourselves. And that's the thing. That's exactly what the Department of Interior wants to see, that we are true to the fact that we are not spending more than what we should.”
Mendiola fielded questions about government perks, including travel and vehicles. He said the executive branch was already preparing directives to curb excess and assured there will be cuts, but added they have to make sure they don't compromise emergency services in doing so.
When asked if public schools would see shortened school years or reduced programs, Apatang admitted the decision would be painful.
The first tranche of relief-about $5.7 million-has been identified for the CNMI's first-quarter needs, including utilities, medical referrals, inmate care, and partial pension support. But King-Hinds urged the public to temper expectations.
“I just want to manage everybody's expectations given how hard the environment is in Washington, D.C. right now with regards to what they call bailouts, because let's make no mistake about it—this is this is a bailout!”
Report by Mark Rabago
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