$50M bond borrowing mulled for road repairs
Recognizing the long-standing need to repair some of Guam’s worst roadways, Speaker Benjamin J.F. Cruz is considering a bond bill that would authorize $50 million in village road projects paid through the island’s Guam Highway Fund (GHF). If introduced and passed into law, Cruz’s proposal would represent the single largest local investment in village road repair and construction in years.
To ensure the potential borrowing bill receives a thorough review before introduction, the Speaker has called a roundtable hearing to discuss the draft measure. Set for Wednesday, February 1st at 2PM, the hearing will garner critical input from several stakeholders and officials, including the Guam Economic Development Authority, the Office of the Governor, the Bureau of Budget and Management Research, the Mayor’s Council of Guam (MCOG), the Department of Public Works (DPW), and the Public Auditor.
The Speaker, who has repeatedly spoken out against unnecessary borrowing in the past, contends that, unlike previous bond measures, his proposed bill would be a direct investment in the people of Guam—aligning with the intent of new language written within the 34th Guam Legislature’s Standing Rules. According to Section 6.01 (b), only borrowing measures that fund capital improvement or long-term projects can move forward in the Legislature.
“When we borrow for short-term operational needs, our taxpayers are left with nothing but debt. But when we borrow to fix roads or repair schools, we are paying for a community investment that will last long after that debt is paid,” said Cruz.
While Federal Highway funds are the primary source of funding for routed roads, Cruz notes that Guam’s village streets must be funded locally through the Guam Highway Fund, which receives its revenue through the Liquid Fuels Tax as well as driver’s license and vehicle registration fees.
Cruz’s draft measure would authorize the Governor to issue a series of Limited Obligation Highway Bonds to fund several of Guam’s Capital Improvement Village Streets and Roadway Projects through GHF. With an interest rate capped at 5% a year, the proposed bond borrowing is estimated to cost $3.5 million per year for 25 years. The MCOG and DPW would then determine which village streets and roads to repair based on the Guam Village Streets Master Plan, with unsurfaced streets and roads given priority. While the Speaker is confident in the measure as proposed, Cruz says he is open to potential suggestions raised at the hearing to improve the bill.
“It’s time we face the hard truth: Guam’s roads cost people money. That’s why we need this bill," said Cruz. “For every employee late to work because of a worn tire, every family short on cash because their car is sent to the shop, and every accident that injures or almost takes a life, today we begin to lift the economic burden on those least able to afford it.”