Chamber warns of economic ripple effects as CNMI faces fiscal crisis, possible 20-hour workweek

The Saipan Chamber of Commerce is warning of widespread economic fallout as the Northern Mariana Islands government eyes a 20-hour workweek amid a deepening fiscal crisis—a possible outcome that was assessed even before Super Typhoon Sinlaku directly hit Saipan and Tinian in mid-April.

Chamber president Joshua Wise told Marianas Press that the decision reflects the severity of the Commonwealth’s financial situation but will have significant consequences for households and businesses alike.

“The Saipan Chamber of Commerce recognizes the difficult decision to reduce government employees to a 20-hour work week. We understand this measure reflects serious fiscal challenges facing the Commonwealth, and we acknowledge the impact this will have on many hardworking families in our community.”

At the same time, he said the reduction in income across a significant portion of the workforce will have ripple effects throughout the broader economy. Wise added reduced household spending will inevitably affect local businesses, particularly in retail, food service, and other consumer-driven sectors that depend on steady local demand.

“Many of these businesses are still working to recover in a challenging environment following Super Typhoon Sinlaku, managing increased costs, reduced operational hours, and ongoing uncertainty.”

The comments come as Gov. David M. Apatang has submitted a $101.9-million general fund budget for Fiscal Year 2027 to the 24th Legislature, sharply down from previous spending levels and constrained by declining revenues.

General fund revenues are projected at about $157.7 million, down from $172 million in FY2025 collections after adjustments for one-time revenues, anticipated business closures, and economic risks. After accounting for $55.8 million in fixed obligations, only $101.9 million remains available for appropriation.

“This structural constraint significantly limits fiscal flexibility,” the governor said.

The proposal does not yet include the expected fiscal impact of Sinlaku, which damaged infrastructure and disrupted economic activity, likely increasing expenditures while further suppressing revenues.

“With available resources sufficient to support only a 20-hour work week, this budget reflects reduced personnel costs and constrained operations across all branches of government,” Apatang said. “To preserve essential services, it will be necessary to implement furloughs and responsibly resize government operations.”

Wise also raised concerns about added strain on public services, particularly healthcare.

“We are also concerned about the potential unintended consequences on our healthcare system. With reduced earnings, some employees may be forced to drop their existing insurance coverage and turn to Medicaid. This shift could place additional strain on an already burdened program, increasing costs for the government and creating longer-term fiscal pressures,” he said.

The proposed $101,887,467 budget is balanced against projected revenues, with 39% allocated to personnel, 58% to operational expenses, and 3% to utilities, effectively supporting part-time government operations.

The Public School System is allocated $37.7 million, a 12% increase from FY2026 but below its $52-million request. Northern Marianas College would receive $6.59 million, including $6 million from the general fund.

Government contributions for group health and life insurance total $6.39 million, covering both active employees and retirees.

The Commonwealth Healthcare Corp is allocated $1.08 million for its Health Network Program, far short of the $5.9 million requested for off-island care.

Across the CNMI government, 346 vacant positions are being removed.

Utility funding totals $2.65 million, prioritizing the executive branch to meet court-mandated requirements and support energy assistance programs. No utility funding is provided for other agencies, which are urged to adopt energy-saving measures.

“This is a challenging moment for our community, and it underscores the importance of working together to navigate the road ahead,” Wise said. “The Chamber looks forward to continued collaboration with government and community partners to support economic stability, strengthen our workforce, and help ensure a steady recovery for the Commonwealth.”