GovGuam logs $31.9M surplus
Updated: Jul 20, 2022
By Pacific Island Times News Staff
The government of Guam's general fund ended fiscal 2021 with a $31.9 million surplus. As a result, GovGuam reported a general fund balance of $30.4 million, the first positive balance since 2013, according to the Office of Public Accountability. In 2006, the general fund deficit reached its largest deficit of $524 million. Since that time, the government has achieved a steadily improving trend. This has been managed by maximizing revenues, limiting expenditures, and replacing unfunded current obligations with bonded long-term debt which has structured repayment requirements. This debt represents a level of confidence by outside investors in GovGuam’s ability to manage its responsibilities. Deloitte issued an unmodified or clean opinion on GovGuam’s financial statements.
For FY 2021, the general fund reported revenues (including transfers in) of $782.4 million, a slight increase of $100,000 from FY 2020 revenues and transfers of $782.3 million.
Correspondingly, the general fund reported expenditures (including transfers out) of $750.8 million, an increase of $14.8 million (or 2 percent from FY 2020 expenditures and transfers out of $736 million. General fund revenues of $728.9 million were higher than the budgeted estimated collections of $649.7 million.
The net increase of $79.2 million is primarily attributed to income tax collections of $89.9 million above budget, offset by gross receipts tax and Section 30 federal tax collections of $7.6 million and $3.5 million, respectively, below budget. Revenues have been under-budgeted since FY 2019. GovGuam’s total net position decreased by $36 million (or 1.5%) from a negative $2.4 billion in the prior year to a negative $2.5 billion in FY2021. This was primarily attributed to expenses for governmental activities of $2.1 billion exceeding revenues for governmental activities of $2 billion.
Program revenues increased by $216.2 million (or 21.8 percent) from the previous fiscal year. The change was primarily due to an increase, compared with the prior year, in operating grants and contributions including $96.6 million in federal assistance received and expended under the American Rescue Plan Act of 2021. Conversely, general revenues decreased by $5.2 million (or 0.6 percent) from the previous fiscal year.
The change was due to an increase, compared with the prior year, in income tax collections of $27.9 million (or 8.6 percent) offset by a decrease in Section 30 federal tax collections of $17.2 million (or 20.9 percent) and other taxes of $16.3 million (or 13.8 percent). For FY 2021, GovGuam’s expenses for governmental activities were $2.1 billion and were funded by $1.2 billion in program revenues, including federal supplements of $1.1 billion, and $825 million in taxes and other general revenues. GovGuam’s expenses cover a range of services. The largest expenses were for public health, public welfare, and public education, which consisted of 23.6 percent, 21.3 percent, and 20.5 percent, respectively, of the total expenses for FY 2021.
Other expenses that make up a portion of the costs of governmental activities include transportation ($54.6 million ), community services ($48.2 million), environmental protection ($42.6 million), economic development ($18.3M), and culture and recreation ($10.4 million). In accordance with the Organic Act, the debt ceiling limitation or public indebtedness of GovGuam must not exceed 10 percent of the aggregate tax value (assessed value) of property in Guam, which amounts to $1.4 billion as of October 2020, the date that such certification was performed.
Total debt outstanding as of Sept. 30, 2021, subject to the debt ceiling limitation, was $989.3 million. The legal debt margin as of Sept. 30, 2021 was $364.7 million.
During FY 2021, GovGuam’s overall total long-term debt decreased by $54 million. The decrease in long-term debt was the result of debt service associated with GovGuam’s general obligation of $1.7 million and bonded debt of $52.1 million, respectively. (OPA)