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03/07/25 - The administration of Gov. Arnold I. Palacios is looking at tapping $414 million in leftover Pandemic Unemployment Assistance and Federal Pandemic Unemployment Assistance funds to jumpstart the sputtering local economy.
In a press conference last Thursday at the Governor’s Office conference room on Capitol Hill, Palacios said his administration made the request during his recent trip to Washington, D.C. where he attended the Interagency Group for Insular Affairs conference.
He also clarified that using leftover PUA and FPUC funds is not a form of a federal bailout.
“So those funds are already allocated to the Commonwealth. What we're asking is to repurpose those funds so that it doesn't have to go through the appropriation process in Congress...I'm not asking for a bailout. I'm asking to repurpose [the] funds to invigorate [our economy].”
In essence, Palacios said he wants to repurpose those leftover funds towards the CNMI’s economic recovery.
“[Will use the funds for] essential government services to shore up other industries in the Commonwealth, low interest business loans to our existing businesses in the Commonwealth that are struggling, to incentivize airlines and [companies involved in the tourism industry] to come in, and help our hotel industry that is still struggling,” he said.
In a March 4, 2025 letter to Delegate Kimberlyn King-Hinds (R-MP), Palacios broke down how his administration will use the $414 million in leftover funds from PUA and FPUC and they are as follows:
$231 million for economic recovery
$120 million to strengthen public services
$55 million for strengthening public health priorities
$8 million for community enhancement
“This plan includes funding for economic recovery through tourism and airline support initiatives, as well as other initiatives that would promote private sector growth. I have included restoration of revenue losses for the central government and autonomous agencies to respond to the impact of a post-pandemic recovery,” said Palacios.
He added that he will be tapping the Commonwealth Economic Development Authority to play a key role on how to best use the leftover funds from PUA and CPUC.
“This is not going to be a giveaway to newly formed companies. This is going to be evaluated for companies that are already in existence that need the help that they need. So, CEDA will play a major role in that regard and I'm very confident that they will come up with what is fair, what is reasonable, and what is in the best interest of the people and the Commonwealth.”
During the IGIA conference, he also asked the Department of the Interior to restore 702 funding to the CNMI. Section 702 of the Covenant provides for an initial seven-year period of financial assistance to the CNMI government. Throughout the years, the CNMI’s 702 funds has also been divvied up to other U.S. territories.
The last time it was negotiated 22 years ago during the term of former governor Juan N. Babauta, Palacios said the Commonwealth got $27 million. He now wants that sum to be adjusted for inflation and wants the CNMI to get the full $62 million a year in 702 funding.
“Key provisions, elements, and parts of that agreement have been ignored for almost 22 years and we need to get back to that real fundamental issue of our Covenant...When we brought it up, [Interior] was very interested in getting that addressed. So, I think, I really believe the takeaway from those meetings is that that's going to happen fairly soon.”
Palacios also answered other issues during the close to hourlong press conference, including back pay for members of the Commonwealth Casino Commission, the auction of Imperial Pacific International (CNMI) LLC’s casino property, updates on Marianas Air Connection Services, and birth tourism.
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Story by Mark Rabago
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