NEWS: Administration Weighing Deeper Cuts
Private school bussing, streetlights, and recreational facilities on the table.
March 7, 2018
Hagåtña — Months after the implementation of federal tax cuts, the legislature failed again to address the governments $67M shortfall over the next 6 months. This has put government services, employees and the economy under stress.
Governor Calvo has called the legislature into session over five times the past few weeks on bills authored by both Democrat and Republican lawmakers, but each time the legislature has failed to pass a bill.
Since January the administration has taken action to ensure that the government does not run out of money, which would lead to a payless payday and a government shutdown. In addition to the bills introduced, the administration has started several cost-cutting measures to include:
Hiring freeze
Furloughs — The furlough process has been initiated for thousands of government employees.
Non-renewal of Limited Term Appointment employees. The count is 40 and growing.
Overtime, Administrative Leave, and travel has been suspended except in certain cases.
Overtime Reduction — cost cutting measures have been implemented across government agencies to include GPD, DOC, and GFD, causing two fire stations and a police precinct to close.
Reduction in executive security costs. The Governor and Lt. Governor have directed the reduction in overtime in executive security.
In addition to these measures, budget Directors are containing costs on all agencies under their purview.
“Because the legislature has failed to pass even their own bills, I regret to inform the public that cuts to everything on the table. My team has advised me of dire service cuts that may be necessary in the immediate future if the Legislature doesn’t pass a bill very soon. These cuts will continue to hit public health, safety, and education without the ability to furlough sooner,” Governor Calvo said.
The Governor’s Office solicited cuts in services from agency heads and staff yesterday. The following cuts are being considered in addition to many others:
Suspending government bussing to private schools.
Disconnecting 50% of streetlights
Cutting leases at government agencies. E.g. Department of Chamorro Affairs, CAHA, Department of Revenue and Taxation.
Cutting service contracts. I.e. Guam Museum operating contract.
Suspending operations at government gyms and recreational facilities to include the Paseo Stadium, Hagatna Pool, Dededo Pool and Dededo Sports Complex.
Suspending operations at recreational facilities in the evenings to conserve power.
Shutting down the Department of Rev and Tax driver’s license satellite office, located in Hagatna, which services approximately 100 people per day.
“We have sent multiple solutions to the legislature to address the $67 million in cuts the next 6 months, but they have not passed a solution. The consequence of this inaction is causing deeper cuts and pain in the community. I’m looking for partners down there who will address the fiscal crisis and answer the call to leadership,” Governor Calvo said.
The solution to the fiscal crisis lies with the Legislature. They must act and pass a bill.
FREQUENTLY ASKED QUESTIONS:
Q. Why is the Administration cutting more services?
A. Without a funding measure passed by the legislature to address the legislature’s estimated $67M shortfall this fiscal year, ALL government agencies MUST reduce costs. Because of the incredible amount, without action by senators, unfortunately, EVERYTHING is on the table.
Q. Why cut into issues that affect areas in public safety like streetlights and private school bussing? Why not cut non-critical services outside public health, safety, and education first?
A. The largest cost in government is government is personnel. The original plan by the Administration to address the fiscal crisis was to implement a 32 hour work week this past week, without touching critical areas like public safety and education. After consulting the Attorney General, it was clarified that a 90 day notice must be issued equitably before a furlough could be implemented. The lengthy furlough process along with the legislature’s failure to pass one if its bills forces deeper and more severe cuts across ALL agencies.
Q. Why are you not making cuts at other agencies, and leaving public safety agencies alone?
A. ALL AGENCIES ARE MAKING DEEP CUTS. The cuts noted above are highlighted due to the impact on the community.
Q. The Administration and the Legislature knew about federal tax cuts for some time now, why are you only taking action now?
A. The specific impact of federal tax cuts were unknown until tax tables came out on January 12th. Since this time, action has been taken by the Administration. To date, the Governor has submitted multiple bills to the Legislature to address the fiscal crisis, and the Legislature has failed to take any meaningful action on the solutions proposed by the Administration.
Q. The Administration has been accused of “manufacturing” a crisis. What do you say to this?
A. Federal tax cuts will cause and incredible $67M cash shortage for the balance of the fiscal year. The credit watch issued by Standard & Poor’s yesterday, an independent 3rd party, reaffirmed the urgency.
Q. Who can solve this problem?
A. The Legislature. They must pass a bill to address this issue.
Q. Senator Frank Aguon and Senator Regina Lee have introduced amendments that cut things like cabinet pay and executive security pay, why not cuts like these?
A. Cuts to political staff and cabinet are already in motion with the furlough process. In addition to this, the Governor and Lt. Governor have already issued a directive to the police chief to cut executive security. The magnitude of the challenge before senators is much larger than these “micro cuts” which save only a fraction of the $67M shortfall. They need to focus on the bigger picture.
Q. What if senators don’t act?
A. Failure and delayed action by senators on addressing the shortfall will cause deeper pain to working families, local businesses, and hurt the island economy. Employees are already losing their jobs, household income will fall sharply if this continues, local businesses sales will decline, and the economy will take an unnecessary hit due to inaction by senators.
Q. How can I help?
A. Reach out to your senators. The solution to the fiscal crisis lies with the legislature. They must pass a bill.