CNMI Gov. Arnold Palacios notified House Speaker Edmund Villagomez and Senate President Edith Deleon Guerrero on Thursday that there is a budget reduction for fiscal year 2024.

Palacios said that is a cumulative shortfall of $3.4M.

“Although tax collections for Business Gross Revenue Tax, Income taxes, and Hotel Occupancy are within acceptable targeted forecast ranges, the Excise Tax and other tax categories suffered significant shortfalls of up to 30% at the end of the third quarter, resulting in an overall shortfall of 3.0% in the Taxes category,” the governor explained in his letter to the CNMI legislature.

The Governor added, “Although collections in the remaining months of the fiscal year may offset these shortfalls, it would be prudent to initiate a conservative reduction in budget authority to mitigate the anticipated fiscal year-end deficit.”

Palacios noted that government operations will be further impacted amid ongoing austerity measures. But he said he wants to “quickly realign” the spending plan.

“??It is imperative that agencies and activities examine their operations and identify areas where they may be reduced or eliminated,” Palacios said.