How do you tackle a fiscal crisis?

(Updated Aprll 7, 2018 with response from Leon Guerrero-Tenorio Team)

Invoking a supposed fiscal crisis created by President Trump’s federal tax cuts, Gov. Eddie Calvo wrestled with the reluctant Legislature into passing a tax bill to rescue the government’s finances as well as the Guam Memorial Hospital.

The eventual passage of Sen. Joe San Agustin’s Bill 248 that would bump up BPT by 25 percent instead of 50 percent and levy a 2 percent sales tax on all goods and services by Oct. 1 has paved the way for the governor to sign the compromise legislation. But whether or not the additional burden on the taxpayers would solve the government of Guam’s perennial funding shortfall is yet to be seen.

GovGuam is a veteran of financial meltdown. Every administration oftentimes picks up the short-cut solutions: bond borrowing or tax hikes, both typically frowned upon by voters and taxpayers.

For the first in our series of questions toward the general elections, we asked gubernatorial candidates how they would solve – or would have sought to solve — the financial crisis if they were running the government from Adelup.

The Democratic camp has four candidates seeking the party’s nomination in the Aug. 25 primary: Sen. Frank Aguon, Sen. Dennis Rodriguez, former governor, Carl Gutierrez; and Bank of Guam president and former senator, Lourdes Leon Guerrero On the Republican side, Lt. Gov. Ray Tenorio is running unopposed.

“If you were the governor now, how would you address the current “fiscal crisis” caused by federal tax cuts?” Their responses are as follow.


Running mate: Alicia Limtiaco (former U.S. attorney)

We are facing very fiscally challenged times, but more importantly we must recognize that this situation cannot be fixed overnight by means of a quick cash infusion or band-aid solution, only for the same dilemma to recur again in a few short months. The root of the problem lies in a government that is operating beyond its means and a government that is in dire need of a complete overhaul. Only three months into the new year and we have already seen significant increases in the cost of living on Guam. They have come in the form of a rise in gas prices at the pump, liquid fuel taxes, and utility rates. We must consider the quality of life of our people; and asking them to bear the burden of any tax increase at this point in time is unjustified.

Several weeks ago, in an effort to stabilizing our government, I introduced Bill 247-34 – The Government Priorities Act of 2018. The bill prioritizes, education, health, and public safety and gives the Governor the means necessary to prioritize, reorganize, and stabilize the government without raising taxes. A myriad of rules and regulations have made the government reorganization process difficult for any governor. Bill 247-34, cuts through the red tape and authorizes the Governor to implement necessary measures by means of an executive order.

Through Bill 247-34, education, health, and public safety will be the government’s top priorities listed in Group I: education health, and public safety. Group II is composed of entities that provide services which are involved in support, enforcement, regulations, adjudication or administration; and Group III is composed of other entities of the Executive Branch. This measure would continue to recognize the employees’ rights to representation under Public Employee-Management Relations Act. The measure would give the governor the authority to outsource, privatize, eliminate redundancies, and combine the functions of agencies. It is through these measures that will see the government through in transitioning from its present state of finances.

I’m advocating for streamlining our government. I am advocating for the reprioritization of the Government of Guam so that that our Education Superintendent does not need to make a millions of dollars in cuts to education. I’m advocating for the reorganization of our government, so that the Guam Fire Department does not need to shut down fire stations in Astumbo, Piti, or Talofofo. I’m advocating for a restructuring of our government so that our police officers can work out of the Hagatña Precinct and protect our streets. These are critical services that should never be first on the chopping block.


Running mate: Fred Bordallo (former police chief)

“Gutierrez Bordallo 2018” has watched with disappointment as the current administration and legislature have struggled to come to a consensus on a course of action for the proper management, collection, and allocation of public revenues throughout this fiscal crisis.

Meanwhile, our people face payless paydays, furloughs, and unaffordable tax hikes. The Gutierrez Bordallo team believes it is imperative to operate with fiscal and fiduciary responsibility, ensuring residents and tourists have safe streets, adequate emergency services, and public parks and playgrounds, rather than closing places that provide such necessary safeguards and healthy activity.

Our team believes elected officials must make the hard choices and cut salaries and suspend operations of departments that do not provide essential services related to health, public safety and education. That means dropping the false pride and remembering that through respectful negotiation, politics is the art of the possible. Faced with the current financial shortfall, team Gutierrez Bordallo would identify all non-essential political hires under our administrative umbrella and cut up to one third of these employees. This would help free up the funds necessary to alleviate critical shortfalls.

We would designate such funds to keeping our hospital fully operational, our streets safe, and all emergency services and police operations fully functional. We would also fund the advancement of educational needs to afford our rising generation the unimpeded opportunity to learn and grow in ways that keep pace with today’s high-tech jobs market. We are in no way suggesting that non-essential employees do not do their jobs, nor even that they do not do their jobs well. But we are saying we’re acutely aware of the critical importance of making the tough calls to provide the highest quality of life possible when resources are strained, by providing adequate services, needed support, and essential government operations.

If the seated administration were to restructure or eliminate non-essential offices and positions in order to streamline funds and save money, the situation could improve without affecting the operations of key agencies and public services. By reconsidering approximately $8 million in salaries and benefits provided to non-essential hires annually, even if the current administration cut back by a third of their spending, we would be able to pay the shortfalls at GMH without concern.


Running mate: Dave Cruz (educator)

First, we would determine what, if any, needs were immediate, and if any reductions needed to be made in order to stay within our budget and those reductions would be done according to priority.

Foremost, I would ensure that public health, public safety, and education services are safeguarded and insulated. These critical services cannot be jeopardized even if it means other government agencies are consolidated or abolished. We can no longer allow our people to go to sleep at night worrying about their safety, or our kids wondering if their school would be open tomorrow, or if our hospital will be open to treat the sick.

I would be meeting with senators daily and remain in a respectable and honest dialogue with them until a solution is reached. My administration will not employ any pressure or bully tactics on them or anyone for that matter.

My administration would be working with the private business sector in a private-public partnership to fast track development and other business opportunities by ensuring agencies within the executive branch process applications and permits within three business days of filing. Bureaucratic regulations will be administratively waived, if authorized by law and when the safety, health, and wel