Governor seeks to take over fiscal control of Guam education agency

New bill proposes higher budget for GovGuam, proposes policy changes

By Jayvee Vallejera

Gov. Lou Leon Guerrero's revised budget measure, which raises revenue projections for fiscal 2027 and proposes a fiscal takeover of the Department of Education, among other policy reforms, may face headwinds at the Guam legislature.

Sen. Chris Duenas, chairman of the Committee on Finance and Government

Operations, said the legislature hopes to peg the budget at the same level set in the vetoed bill.

Chris Duenas

 After rejecting Bill 266-38, Leon Guerrero sent a revised budget version that raises revenue projections by about $18 million in “additional recurring corporate income tax collections.”

“Based on our Special Economic Service meetings, I remain confident in the revenue levels contained in the legislature’s budget that she vetoed, and I am eager to hear from her fiscal team how they arrived at this additional $18 million projection,” Duenas said.

The vetoed Bill 266-38 capped the budget at $1.403 billion. The governor's Bill 1 (10-S) proposes a budget of $1.421 billion.

The revised bill added 11 new sections.

The revised bill changes the mechanism for using excess revenues.

The legislature's proposed mechanism "directed the chairman of the committee on finance and government operations to introduce a separate supplemental budget bill—due to the clerk no later than 14 August 2026—appropriating revenues in excess of prior-year adopted levels."

The provision was removed in the new bill and in its place, "Three appropriations drawn directly from 'unobligated fiscal year 2026 general fund revenues collected in excess of adopted FY2026 levels,” written into the appropriations act itself rather than deferred to a separate supplemental bill.

Returning to the floor on Wednesday, the legislature will meet as a Committee of the Whole to take up the governor’s revised budget proposal. 

Duenas said his committee has already completed its analysis of the governor’s proposal. The question is whether the legislature will accept the sweeping policy changes Leon Guerrero inserted into her draft bill. Duenas did not specify these sweeping policy proposals.

“I will not speak for my colleagues and would rather allow that discussion to play out through deliberations on the floor,” he added.

With a little over 40 days left before the fiscal year ends on Sept. 30, Duenas is confident the legislature will be able to pass a budget for government operations in fiscal 2027 “sooner rather than later.”

Duenas said he is also grateful that the governor's revised budget maintains the business privilege tax at 4 percent, indicating that the governor is finally recognizing that a strong economy requires a viable private sector.

The BPT is set to drop from 4.5 percent to 4 percent on Oct. 1, 2026. The increase from 4 percent to 5 percent in 2018 was supposed to be temporary to cover a revenue gap due to federal tax changes.

Among those who are expected to appear before the committee are representatives of the Office of Finance and Budget, Bureau of Budget and Management Research, Department of Administration, Department of Revenue and Taxation and Guam Economic Development Authority.

Duenas said there is general agreement as to how his committee intends to appropriate any additional revenues, “and I am confident we can pass a budget sooner rather than later.”

With the legislature set to deliberate on a new budget that will cover the next fiscal year, this makes it an ideal time to begin performance-based budgeting, Duenas said, since a new Legislature and a new governor will take office during the new fiscal year.

“I am pleased the governor has seen the value in supporting this initiative because it gives the incoming leadership an opportunity to take inventory of government services, establish clear baselines, set measurable benchmarks, identify where improvements can be made, and provide a roadmap for achieving them,” he said.

Duenas was quick to point out that this is not about punishing anyone, but about giving policymakers and agencies better tools to ensure the people of Guam receive the quality services they deserve.

Subscribe to

our digital

monthly issue