Cruz: Let's figure out if $125m GMH plan will work before more massive borrowing
Before the Guam Legislature considers a voter referendum to authorize millions in tax increases and massive new debt for the Guam Memorial Hospital, appropriations chair Speaker Benjamin J.F. Cruz believes taxpayers deserve an updated, independent cost-benefit analysis of the hospital’s $125 million plan to determine whether or not it will actually solve more problems than it creates.
“I think we are all tired of the Governor and me bickering at each other like children at recess. But I can't ignore the fact that GMH’s proposed business plan has some serious holes in it. According to GMH’s own financials, the revenue generated from expanded services will be $22.3 million by 2023, but the expenses for those same services will be $46.2 million,” said Cruz.
Introduced by Cruz and Senator Dennis G. Rodriguez, Jr., Bill No. 193-34 (COR) would require the University of Guam to contract withr experts to conduct 1) an Economic Impact Statement of a tax increase to the Business Privilege Tax, and 2) an independent cost analysis of GMH’s Business Sustainability and Facility Master Plan—ensuring that any capital improvement projects proposed by the hospital are cost-effective for Guam’s taxpayers.
“New debt doesn’t fix old problems. Making better choices does. To make better choices about GMH’s proposal, we need an independent review of the data from experts in the field. We can’t afford any more multi-million dollar mistakes,” said Cruz.
Simultaneous to the studies, Cruz, Senator Rodriquez, and Senator Regine Bisccoe Lee—recognizing the need to upgrade life-saving services at GMH—introduced Bill No. 194-34 (COR), appropriating $1,500,000 to the hospital for the sole purpose of purchasing a Magnetic Resonance Imaging (MRI) machine. Funding will come from the Healthy Futures Fund.
“A hospital without an MRI is like a carpenter without a saw. I know how important this lifesaving tool is and I hope we can get it to GMH as soon as possible,” said Cruz.
The appropriations chair introduced both bills as a precursor to Bills No. 141 and 142, Governor Edward B. Calvo’s dual measures, which propose to fund GMH improvements by borrowing $125 million and raising the BPT from 4 percent to 4.75 percent, without voter approval. While officials from GMH have touted their plans as rationale for the governor’s bills, Cruz contends that raising the GRT plus new debt that will last three decades warrants an independent analysis conducted by those who will not directly benefit from the tax hikes and large-scale borrowing.
As a result, Bill No. 193-34 appropriates $500,000 from the Healthy Futures Fund balance to UOG to fund an independent economic impact study of the proposed BPT increase as well as a cost-analysis of GMH’s Business Sustainability and Facility Master Plan. Under Cruz’s proposal, the EIS must be completed by an economist, bearing qualifications similar to the 2015 minimum wage study mandated by Public Law 32-229. Likewise, the cost analysis must cover the verification of the demolition, renovation, and construction costs proposed for the expansion of GMH, as well as an analysis and review of funding alternatives for each of GMH’s proposed projects. Bill No. 193-34 further mandates that the EIS and cost analysis be transmitted to the Speaker of the Guam Legislature not less than sixty (60) days prior to the legislative consideration of any bond authorization to fund Capital Improvement Projects at the hospital.
“Every time one of our utilities considers raising its rates to pay for massive new debt, the PUC can rely on independent experts to verify the assumptions made—separating fake news from the facts. Why should we take a less judicious approach here?” said Cruz. “If we were wise enough to require this kind of data-driven approach years earlier, maybe our children wouldn’t be saddled with decades of irresponsible debt.”