September 2, 2013
NOTE: Below is the Governor’s letter to Speaker Won Pat calling the Legislature into special session at 11 a.m. today.  He sent the Legislature into session to pass the new budget bill (click here), following his veto of the one sent to him last week (Bill No. 177).  The Governor has been working with his fiscal team and senators on the compromise budget throughout the weekend.  Photos of the working sessions following the Labor Day Picnic yesterday and again this morning at Adelup are also attached for your reference and use.  Cutlines for the photos follow the text of the Governor’s letter.
Governor’s Letter:
                                          September 2, 2013
Honorable Judith T. Won Pat, Ed.D.
I Mina Trentai-dos na Liheslaturan Guahan
155 Hesler Place
Hagatna, Guam 96932
Dear Madam Speaker,
Let me first thank the Legislature for the members’ determination to pass a budget in time for the new fiscal year. I know how difficult it is to spend long hours away from family to fulfill this duty to the people of Guam. I am committed, just as you and your colleagues are, to pass a budget that is fiscally responsible, socially compassionate, and — most importantly — reflective of the priorities of all Guamanians.
I regret to inform you I am returning Bill No. 177 without my signature with the objections I outline below. This notice is pursuant to my veto power contained in §1423i of the Organic Act of Guam.
Before explaining my objections, I want you to know I appreciate the willingness of the Legislature to include budgetary provisions contained in the budget I proffered during the session I convened two Fridays ago. This effort to find middle ground and break the impasse is a step in the right direction. The importance of this bipartisan dialogue is why I proposed to meet with Sen. Pangelinan at his office Wednesdaymorning. Sen. Tony Ada tried to make the arrangements and was told Sen. Pangelinan was unable to meet. So, I proposed to meet Thursdaymorning at 11 a.m., again at Sen. Pangelinan’s office.
I did not get any confirmation of our meeting. Instead, I found out through talk radio that you had called for session to convene at that very hour I proposed to meet with Sen. Pangelinan. I then discovered the purpose of the session was to debate a new budget proposal by Sen. Pangelinan.
I was very hopeful such proposal would have been the compromise we were working toward, even though no Democrat but Sens. Muna Barnes and Rodriguez had engaged in any conversation with us. Had we spoken before the introduction of Bill No. 177, I believe we would have reached an acceptable compromise on COLA, tax refunds, and spending priorities. If we reached that compromise through open dialogue, perhaps the Legislature would have had the opportunity to understand pressing fiscal issues so senators could send me a bill that I would sign.
Unfortunately, I cannot, in good conscience, sign the bill sent to me, and therefore it is vetoed upon return to you with the following objections:

  1. The Organic Act of Guam requires the Legislature to pass a balanced budget.  Bill No. 177 is off balance by $7 million, due to a double appropriation of the Territorial Education Facilities Fund when considering a previous appropriation, among other factors.
  2. Bill No. 177 does not make the advance appropriation needed to allow me the authority to provide cash to Guam Memorial Hospital for the next two pay periods. This lack of legislative authority binds me from assisting the hospital further with its needs. I have been releasing cash to the hospital to sustain operations, however, I am out of the legal authority needed to help the hospital further. This was the primary issue I wanted to discuss with Sen. Pangelinan both times I tried to meet with him. I was hopeful senators would consider making an amendment to Bill No. 177 following the meeting of the hospital Board of Trustees Thursday night. I thought senators would address this matter when the Legislature resumed session after receiving this information directly from GMH officials. Much to my chagrin, the budget was passed without any additional assistance to GMH. There was discussion about a supposed $1 million increase for GMH, however, that was derived by eliminating the Department of Corrections’ appropriation for prior GMH debt and transferring it as an appropriation for hospital operations. It is an interesting scheme on paper meant to show an increase to GMH appropriations, however the net affect is a meager $90,000 increase from the original request. That is a drop in the bucket compared to the legal authority we need to keep the hospital operating.
  3. The Provision for Tax Refunds at $120 million is a paper-entry that will restrict at least $7 million unnecessarily. If senators want assurances that tax refunds will be paid, we simply should examine the record of our administration to demonstrate that tax refunds will be paid, no matter what a paper entry says.

In the true spirit of compromise, my fiscal team has drafted a budget that contains everything you just passed, with the following changes:

  1. The Provision for Tax Refunds will be $113 million, a sum more than adequate for what will be needed.
  2. The appropriation for DOE will be lump sum. I will work with the Superintendent throughout the fiscal year to accommodate DOE’s budgetary needs so the agency is able to sustain operations, provide for the facilities improvements it has outlined, and open a new central high school.
  3. The appropriation for GMH will increase by $9 million.  This will provide me the additional authority to assist GMH to make it through the last month of this fiscal year. The additional sum is taken from the difference between Bill No. 177’s proposed Provision for Tax Refunds and the level I propose here ($7 million), $1.36 million from the Hay study appropriation, $1.125 million from Judiciary merit bonuses, and $35,354 from the Public Defender Services Corporation merit bonuses.  I have added a provision to allow me to find other sources to be used for these bonuses.
  4. The appropriation for phased-in implementation of the Hay Study for all employees now includes authorization to fund the implementation further should additional revenues materialize.
  5. We increase the Guam Police Department’s budget by another $325,000 for new officers and operations.
  6. There are smaller changes that you will find throughout the bill.

I am calling the Legislature into session, pursuant to the authority vested in me by §1423h of the Organic Act of Guam, at 11 a.m., Monday, September 2, 2013 to discuss the new budget proposal. The new budget proposal is enclosed.
Before closing this letter, I wish to recognize the Legislature for certain compromises made and spending priorities set:
–       We have agreed to restoring funding levels for the public safety agencies to the levels we requested. This includes funding to hire more police officers.
–       We have agreed to more funding for Medicaid to assist some of the most vulnerable in our community.
–       We have agreed to funding needed for Adult Protective Services to assist the 151 seniors on a waiting list for inpatient care.
–       We have agreed to funding needed to deliver hot meals to seniors on Saturdays, supplementing the current Monday through Fridayschedule.
–       We have agreed to phased-in implementation of the Hay Study for all employees, and not just some.
–       We have agreed to full restoration of the COLA.
Some of these items we agreed upon were the Legislature’s priorities; some of them were mine. We did not agree on all these priorities in the beginning, but in the spirit of compromise, we have achieved these agreements in the best interests of all Guamanians. All that is left to break this impasse is: to fund the Guam Memorial Hospital.
On a final note, it is with deep regret that this compromise to your spending priorities leaves nothing to increase the DOE budget to the level of $225 million, as I would have preferred.  However, this is what compromise is all about.  No party gets everything they want.  I will yield to your spending priorities, which would have gone to DOE had the legislature yielded to the priorities I preferred.
As always, I am available to discuss any concerns you may have over the phone or a cup of coffee.
                              EDDIE BAZA CALVO
(SENATORS): Governor Calvo and his senior staff meet with Senators after the Labor Day Picnic to discuss a new compromise budget.  The Governor vetoed a budget bill passed by the legislature and called senators into special session to debate a new budget proposal today.
(FISCAL TEAM 1): Governor Calvo and his fiscal team finalize details of his new budget proposal early this morning.  The new budget was delivered to Speaker Won Pat’s house about an hour after this photo was taken.  The Governor vetoed a budget bill passed by the legislature and called senators into special session to debate a new budget proposal today.
(FISCAL TEAM 2): Governor Calvo goes over budgetary figures with his Chief Fiscal Advisor Bernadette Artero early this morning.  The new budget was delivered to Speaker Won Pat’s house about an hour after this photo was taken.  The Governor vetoed a budget bill passed by the legislature and called senators into special session to debate a new budget proposal today.

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