Melvin Alofaisau urges CNMI lawmakers to address military contractor tax exemptions

During a recent session of the Northern Marianas Commonwealth Legislature, community member Melvin Alofaisau raised critical concerns regarding the impact of military construction on local tax revenues. His comments highlighted the pressing need for legislative action to ensure that private contractors benefiting from federal military spending contribute fairly to the local economy.

Alofaisau referenced a statement by Honorable Kimberly King Hines, who emphasized the Commonwealth's legal rights to tax revenues from federal defense spending. He pointed out that while military spending is federally protected, private contractors operating in the Northern Mariana Islands should not be exempt from local taxes. He noted that over $158 million in federal military construction occurred, yet only $87,000 in taxes and fees were collected—less than one-tenth of one percent.

The speaker underscored the strain that large-scale development places on local infrastructure, particularly on the island of Kiyan. He questioned whether private contractors funded by the federal government should also be exempt from local developer's taxes, arguing that these firms benefit from local resources without adequately contributing to the community.

Alofaisau proposed several actions for the legislature to consider: seeking a formal opinion from the attorney general on the applicability of the developer's tax to military contractors, amending the developer's tax act to clarify the status of federally funded private projects, and initiating oversight hearings to evaluate the financial impact of these exemptions on local infrastructure and the economy.

His remarks resonated with the audience, emphasizing that the issue is not about opposing federal presence but about ensuring fairness and transparency in how local resources are utilized. The discussion reflects a growing concern among residents about the balance between federal military activities and the economic well-being of the community.