GovGuam deficit nearly gone; administration pats itself on the back, skips mention of federal aid
Gov. Lou Leon Guerrero congratulated her administration for nearly eliminating the government of Guam deficit and showing a surplus of $46.28 million in the general fund.
Unaudited financial statements for the end of fiscal 2020 show the government deficit dropping to $1.57 million or 0.2 percent of reported revenues.
“As I stated in my first year in office, our island was in a period of transition. Whatever conditions our administration inherited, we promised to move forward. To almost completely eliminate the deficit of over $83 million is a direct result of our commitment to fiscal discipline,” said Gov. Lou Leon Guerrero.
While mentioning federal support in passing, the governor did not bring up the $118 million in federal pandemic relief aid received by GovGuam from CARES Act. It was equivalent to 12.3 percent of GovGuam's $954 million budget in fiscal 2020.
In total, the federal government infused $1.6 billion into the Guam economy through various forms of pandemic relief assistance distributed to individuals, businesses, nonprofit organizations and individual GovGuam agencies.
“Even though a pandemic and a devastating economic landscape that shut down our tourism industry, we continue to stabilize our finances and sustain our island with the support of federal and local dollars," the governor said.
Tourism has been on pause since the first quarter of the past year and local businesses were shuttered for the most part of 2020 as a result of Covid-related public health emergency.
"Now, we continue to push forward in our pledge—to protect our people, to restore our economy, and to improve the quality of life for all those who call Guam home," Leon Guerrero said.
Lt. Gov. Josh Tenorio said "fiscal discipline" will be a hallmark of the incumbent administration.
“When Governor Lou and I came into office, one of the very first things we did was assess our finances, and alleviating our debt burden became one of our top priorities," Tenorio said. "We made it clear that paying our bills timely was critical to not only our financial credibility but our overall stability."
Lester Carlson, director of the Bureau of Budget and Management Research, said the deficit of over $83 million didn’t accumulate overnight.
"The Leon Guerrero-Tenorio administration has now done the unprecedented by nearly erasing that deficit in just two years without borrowing and in the middle of the worst public health and economic crisis of the century," Calson said.
Edward Birn, director of Administration, said the elimination of a deficit "indicates prudent financial management and it sets the tone for what to expect in the future now that we have established our credibility. Experts who have reviewed our financial statements have expressed growing confidence in the management quality and experience of the Leon Guerrero-Tenorio administration.”
The recent successful BPT bond refinancing, which will achieve debt service savings of $63.4 million and the upgrade of Moody’s rating to “stable” from “negative,” are both attributable to this reported improvement in financial performance and careful financial management, according to the governor's office.