Budget blues at Guam Legislature (Updated)

February 27, 2018

Governor Calvo's Bill 245-34 Budget fix fails on 10-4 vote Wednesday

Calvo threatens 32-hour work week for government employees

 Senator Frank Blas Aguon Jr.

 

Tuesday was not a happy day for Guam legislators who spent hours attempting to figure out how to steer the Guam budget bus through a fiscal crisis without mass layoffs of government employees and drastic cuts in services. Wednesday wasn't much better as, following another day of discussion on the floor, lawmakers voted 10-4 to reject the proposal.

 

Governor Eddie Baza Calvo's budget fix-it measure, Bill 245-34 (COR), which among other things would have temporarily increased the Business Privilege Tax (BPT) from 4 to 6 percent, effectively a 50 percent increase.

 

The Guam Office of Finance and Budget had a representative on hand Tuesday to present its analysis.

 Sen. Tom Ada: "From the OFB analysis, we've concluded that the projected revenue shortfall is about $65, 66 million. And the administration has submitted a fiscal realignment plan that has identified $47.8 million in expenditure reductions which means that there's still a shortfall of about $20 million to sustain, basically, the real lean government from this point to the end of the fiscal year. And so I guess my question would be, will the 2 percent GRT increase, let's say over the next 90 days, raise sufficient revenue to sustain the level of the lean operations that GovGuam is going to be undertaking? Or is that going to take us way over the mark and whether we only need a 1 percent [increase]?"

 

Outside the session hall in Hagatna, there was no question that the governor was keeping close tabs on the deliberations and seeking to keep that pressure on the lawmakers. Last Friday, Calvo showed up in person to demand the resignation of all 15 senators if the body didn't pass his proposed bill.

 

On Tuesday, Calvo took a more diplomatic tack as the legislators tackled the problems as a committee-of-the-whole, according to a release from his Adelup communications shop:

 

"Watching the ongoing Legislative session, the Governor is hopeful that we’ll be able to address the federal tax cuts while also helping our only public hospital and our public schools. 

 

'I am willing to work with the senators on the issues they’re concerned with – memorializing our efforts to reduce spending and meeting with senators regularly' Governor Calvo stated. 

 

Thank you to Sen. Espaldon and Sen. Torres for remembering GMH. 

 

We also thank Sen. Tom Ada and Vice Speaker Terlaje for their efforts to ensure we remain committed to reducing costs. We also thank all senators who have stood up for our government, our hospital, our schools and our people."

 

The governor made it clear he had heard the complaints of some senators that they did not have a clear picture of the government's precarious finances since  they had not heard from autonomous agencies in possession of various 'special funds.' Sen. Telena C. Nelson urged at one point that these agencies be hauled before the body to reveal their finances under penalty of perjury. Sen. Frank Aguon has also been calling for this information.

 

 

Governor Calvo said--after the Tuesday session ended--that the Guam Department of Administration started gathering this information from line agencies only on Monday. "DOA also sent a request yesterday for the same information, as requested by Sens. Aguon and Nelson, to autonomous agencies and other government branches that do not fall under the Governor’s purview. They still are awaiting information from: 
 

• Legislature
• Judiciary
• Guam Retirement Fund
• University of Guam
• Guam Power Authority 
• Guam Waterworks Authority
• Guam Community College  
• Guam Regional Transit Authority 
• Guam Solid Waste Authority"

                                                                                                                                             Senator Telena C. Nelson

 

Calvo urged agency representatives to join the ongoing legislative discussion on Wednesday.

 

Meanwhile, in yet another press release, Governor Calvo requested that his legal team and fiscal advisors initiate a 32-hour work week, effective Tuesday, Mar. 6.

 

"After days of session, multiple SES meetings, public hearings, and committees of the whole, the Legislature has failed to take any meaningful action brought on by federal tax cuts or to address the financial shortfalls at GMH. “While I appreciate the work of senators, they have taken too long and time has run out. I have no choice now but to take immediate and meaningful action,” Governor Eddie Calvo said. “Payless paydays are on the horizon and we need to cut costs now.”

 

The Governor said he was hopeful that the senators would have acted on one of his two bills by now, or passed an alternative solution. No successful amendments or compromises have been passed, and the Legislature recessed until 8 a.m. Wednesday. It is unfortunate, as this will cause pain and financial hardship on thousands of working families, affect business sales, and bleed into the economy.

 

The Governor said he will refrain from traveling for business and is calling on all senators to do the same until a solution is passed to address the fiscal crisis. “As with past cuts, my administration at Adelup will lead by example and take the cut along with the thousands of government employees” Calvo said. To date the Governor has proffered two bills in the last month to address the fiscal crisis. The Legislature has yet to put a proposal forward. Addressing the fiscal issues before us requires a legislative action. The Administration is requesting those affected to call their senators."

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