Bouyed by tourism boom and increased defense investments, Guam’s economy has been posting a 2 to 3 percent annual growth in the past 10 years. Guam’s gross island product hit $5.2 billion in 2016. Economists attribute the economic growth to a surge in construction activity, sparked by the military buildup and hotel development to accommodate tourism growth.
Economists, however, have noted the lack of homegrown industries that would allow Guam to sustain a long-term economic growth.
For the continuation of our Q&A series, we asked the gubernatorial teams: “What are your plans to expand the Guam economy? What do you think is the most feasible industry to supplement tourism and military?”
Their responses are as follow:
Carl Gutierrez-Fred Bordallo (D)
Growing Guam’s economy will take a group effort from all of us. The Gutierrez-Bordallo team would consider the airline service routes for Guam and work with providing more seats and more competitive rates. As former Lt. Gov. Frank F. Blas proposed Guam airlines four decades ago, we would encourage companies like Desupline with local ties to build on this existing industry. This would encourage higher arrival numbers within our tourism industry and enhance opportunities for military buildup with the ability to bring more people to our island, with more money in their pockets to spend in our local economy.
Our team would also consider the telecommunication industry with business-friendly laws that enable local business and military operations to work in tandem. GTA and its current business dealings with the military is a prime example of ways this sort of arrangement works to benefit our island.
Our team would look for ways to enhance the interest of hi-tech companies to consider us the true hub of America in Asia. Smart technology, and environmentally friendly products and services that would complement the lifestyles of our residents, tourists and military personnel would push Guam into an advancing and modern direction.
The Gutierrez-Bordallo team feels strongly that inherited lands should be protected from taxation. This would encourage locals to build on their inherited lands, attracting and encouraging more agricultural based operations and creative new business ventures. Lands used for speculation should still be taxed.
We would do what we could to truly utilize our status as a customs free zone with the air and sea carriers, and work diligently to create a cleaner, greener island with alternative energy, a stronger job market, and a more sustainable Guam.
Lourdes Leon Guerrero-Joshua Tenorio (D)
To expand our economy, we first need a responsible and efficient environment in which to start businesses and create good paying jobs. No small business should wait months for a building inspection and every business should expect that our government understands its own rules and will act fairly.
New focus must be given to opportunities in telecom, transshipment, shipping, aquaculture and trade. We believe initiatives like our Job Creation Tax credit will ignite business startups and raise wages.
We will also restore the Dave Santos Act, allowing the first 100k in small business income to be exempt from BPT. We will reform GEDA and restore its purpose.
We will thoroughly assess the changing composition of our current and future visitor arrivals—establishing the Tourism Action Group comprised of industry leaders and innovators.
We must also acknowledge that any successful model for economic growth must be data driven. Then we can effectively invest in workforce training like the Guam Apprenticeship Program, develop Guam's future as a hub for financial industries, and create a continuum of support for Guam's budding
Dennis Rodriguez- Dave Cruz (D)
The answer is simple, but the work will take the effort of all, and the vigilance of elected officials working with the FBI.
Our economic agenda is more like an economic revolution. We are going to change the direction that money is flowing. With our policies, it will flow away from the bank accounts of big corporations and off island companies and into the pockets of every family on this island. The first pillar of our economic revolution is to help families keep their earnings. We will develop agriculture programs aimed at replacing at least one store-bought food commodity with home-grown produce. This commitment to local manufacturing will expand in our four-year term to other food commodities and non-food commodities and start a strong foundation for a growing export-based economy outside tourism.
Tourism will be honed, focused and modernized to respond to the global travelers’ market. Much of this focus will strengthen existing efforts to build and showcase cultural attractions and all that makes Guam unique and exciting for the resort vacationer.
Our venture into renewed self-reliance in our economy won’t stop at agriculture, fisheries, poultry, livestock, and other non-food commodities to satisfy the market against imported items. We will set the path for medical, therapeutic, and pharmaceutical products and services innate to our population by investing heavily in education, and scientific and laboratory research.
Simultaneous to this effort will be our push to reform the tax code so that it is fair and equitable and so that the poor and the middle class do not take on the disproportionate burden of the cost to run the government. We will require the banks and insurance companies to pay taxes like everyone else. And we will seek out and remove corrupt influences from the market, the government, and our society.
Frank Aguon-Alicia Limtiaco (D)
We will work to stabilize government finances by scaling government spending to actual revenue receipts; invest in the recruitment and training of revenue and taxation personnel to improve collection efforts of past and current obligations; and increase government revenues by growing Guam's primary industry, tourism, and expanding other existing industries, while pursuing external investments in these and other areas.
We believe that fiscal responsibility translates into sustained economic growth for our island. We are committed to strengthening our economy by eliminating government waste and ensuring fiscal responsibility, increasing public-private partnerships, empowering Guam's small business sector, implementing robust social and workforce development programs, and pursuing participation in opportunity zone programs.
Ray Tenorio-Tony Ada (R)
Tony Ada and I will build on the foundation laid by the Calvo-Tenorio Administration, with a focus on great achievements through improved governance and being fiscally-responsible with your tax dollars.
This administration’s effort to improve financial management, implement practical policies like staying within budget and growing our economy has placed Guam on a positive trajectory. As a result, unemployment is at a 25-year low, and we are on the cusp of great economic growth stemming from record tourism numbers and the military buildup.
While our island’s economic position has improved substantially the past seven years, we decreased the deficit under our leadership: from $336 million in 2011 to $106 million in 2017. A budget surplus of approximately $13.4 million in FY2016 and an anticipated surplus in FY2017 didn’t happen in a vacuum. A balanced budget happened because our economy grew from countless efforts coming to fruition combined with good government, all without borrowing money for operations, nor stopping your refunds. This occurred despite federal-imposed hurdles like H2B denials, exorbitant receivers, & tax cuts, and despite Federal unfunded burdens like EITC and Compact Impact.
The Bureau of Budget & Management Research projects realistic revenues using a Composite Revenue Tracking Model and applying statistical weights for each General Fund revenue component, based on two prior fiscal years’ collections. We set aside 2 percent of gross revenues for deficit reduction and impose 15 percent allotment reserve on non-exempt General Fund appropriations. We scrutinize personnel hiring, travel, and contracts, among other controls, all to control costs. Department of Revenue and Taxation is improving to systems and extended a tax amnesty initiative, and the Fiscal Strike Team is assessing where we can become more efficient and effective at ensuring everyone pays what’s expected.
We will continue our focus on fiscal responsibility and economic growth, while improving revenue collections through large investments in new systems coupled with technology.