GovGuam reports strong fiscal performance, but business sector says government operations leave much to be desired

By Pacific Island Times News Staff

The government of Guam generated $1.043 billion in total revenues, exceeding expenses and ending the year with a net surplus of $102 million in fiscal 2024, according to the governor’s office.

“To put these results in everyday terms: Guam finished the year the way a responsible household hopes to—paying its bills, setting aside savings and improving its credit standing,” the governor’s office said. “Just like household finances, that surplus is not all cash sitting in a single account. Portions of it are tied to specific obligations, restricted purposes, or pending obligations.”

The Guam Chamber of Commerce, however, said obtaining a revenue surplus “should not be treated as a victory lap. It should be treated as a turning point.”

The business group noted that GovGuam exceeded its tax revenue target by about $27.76 million in the first quarter of fiscal 2026, despite the business privilege tax rate being slashed from 5 percent to 4 percent beginning that period, defying the administration’s warning that a tax cut would result in government service collapse.

"Now that we know the sky did not fall, we can stop governing by fear and start governing by design," the chamber said in a statement.

The chamber said the next step for GovGuam is to modernize its operations, prioritize efficiency and work within its budget by reducing redundancy, improving procurement speed and value, controlling overtime, and vacancy-driven inefficiencies.

The business group advised GovGuam not to treat its annual budget as a payroll document with everything else squeezed into what remains.

“When payroll consumes 75 percent to 90 percent of a department’s operating budget, there is little left for the materials, supplies and routine upkeep that keep the government functioning day to day,” the chamber said.

“The consequences are visible across the island: aging facilities, deferred maintenance, equipment that breaks down repeatedly, and buildings that deteriorate faster than we can afford to replace. This is not merely an administrative inconvenience,” it added.

The chamber reminded the government that when operations and maintenance are consistently underfunded, capital planning becomes unmanageable, resulting in the vicious cycle of breakdown and emergency fixes.

The Department of Administration, for its part, claimed it has been fiscally responsible, building on reforms implemented over the past six years.

“Strong reserves and disciplined budgeting help: protect essential services; reduce financial risk during emergencies; improve creditworthiness and lower borrowing costs; and position Guam to invest in major infrastructure projects in the future,” the governor’s office said.

Where The Surplus Went
   •   $38.9 million strengthened the government’s main operating account (Fund 100)—the equivalent of adding money to a household’s primary checking account, resulting in a 
   •   $45.5 million unassigned general fund balance, meaning it is available as a financial cushion for emergencies or unexpected costs—similar to a family’s emergency fund.  However, legislative appropriations have eroded this balance, and the additional expenditure that these appropriations represent will be reported in the current fiscal year.
   •   $67.4 million relates to accounting adjustments within the Guam Department of Education, largely tied to the timing of revenues and expenses. This does not represent unrestricted cash available to spend.
  •   $3.8 million was recorded as a surplus in the government’s health self-insurance fund, reflecting continued success in managing health care and pharmacy costs—comparable to lowering insurance premiums while maintaining coverage.  This is being reported separately in the financial statements as a proprietary fund.

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