In mid-December, the Guam Legislature passed the much-needed legislation to provide an additional $25 million in local funding to the Local Employers Assistance Program.
The $25 million in local funding matched the initial $25 million provided by Gov. Lou Leon Guerrero which she allocated from the $564 million in American Rescue Plan funding she has available and under her control.
The $50 million in LEAP is to support the hundreds of businesses and their thousands of employees who have been devastated by the closure of Guam’s tourism industry.
Many in our community applauded the governor’s and the legislature's actions and I did as well but with one big caveat. I asked why so little funding and why did it take the governor and the legislature so long to act? Some may think that $50 million is a lot of money. In normal times I would absolutely agree but we are not in anything near normal times.
By the time Guam Economic Development Authority had the applications and the program up and running, many of the businesses affected had essentially been without customers and therefore without revenue for 22 months already.
Yes, the federal government did provide several programs to assist local businesses in addition to the Pandemic Unemployment Assistance program — which was an absolute godsend — but the Paycheck Protection Program and other major programs ended more than six months ago while PUA ended in September.
So with no real visibility or ability to forecast when tourists will arrive in pre-pandemic numbers, the governor can’t be timid or skimpy with the available federal funding she has at her disposal.
GEDA says there are as many as 1,044 local businesses that are eligible for the program. That means, if all eligible businesses apply, there is only $50,000 available for each individual business. If you take this average of $50,000 per business, it is nowhere near enough funding to help the business cover their non-payroll expenses and certainly isn’t enough to cover payroll for very many employees for more than two or three months.
And if you do the math, you realize most of the businesses were losing money or completely shut down since March 2020 and $50,000, while very helpful, is not nearly enough to keep them afloat. I only use this example to illustrate that the governor and legislature shouldn’t think they have done enough.
Because my real point is $50 million is inadequate and will likely be used up long before the tourism arrival numbers are anywhere back to pre-pandemic averages.
Our tourism industry has been devastated by the pandemic and I am sorry if I sound like a broken record but I keep thinking about the average small and medium-size business that was directly or indirectly serving the tourism industry. Due to no fault of their own, they have been hammered so hard it is amazing so many are still hanging on.
There are currently more than 7,000 unemployed or underemployed people in Guam. That is a huge number for an island as small as ours. The local government has been saved only by the billions of dollars of emergency federal funding. The government of Guam has been spared the pain being felt by those in the tourism industry. If GovGuam hadn’t received the billions in federal funds, our island would be in a crisis unlike any since World War II.
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I am very, very grateful for the federal funding and I realize how catastrophic our situation would be without it. That is why I think the $50 million in LEAP funding is inadequate. The least the governor can do is to reassure the business sector and the entire community that GovGuam will indeed use more of the ARP funding or any other federal funding available to assist in keeping everyone afloat once the $50 million in LEAP funding runs out. Our government can’t be aloof or callous to the reality of the situation that so many face.
The stress of the last 23 months is weighing heavily on the 1,044 businesses and 7,000 plus unemployed and underemployed. The governor and the legislature need to communicate in a very direct and clear way that “more help is on the way” and ensure they don't delay in following through.
Jesse A. Lujan is a former senator who served in the 27th, 28th & 29th Guam Legislatures. Send feedback to jesse@jesselujan.org.
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