The following is Governor Calvo’s reaction to the new Retirement Fund hybrid system, passed into law by 11 senators, who overrode the Governor’s objections:
I’m disappointed by this override, but we’re now past how I may feel about this. The legislature has spoken, and this is the will of democracy. Now it is my job to respect the law and to carry it out.
One of the first things I need to do is meet with the credit rating agencies and let them know that GovGuam will have to begin taking necessary actions and making further budgetary cuts to deal with the financial consequences when they begin to hit in 2018. We will begin preparing employees with the knowledge that more will be coming out of their pay checks in order to pay for this massive expansion of the retirement fund. This will include the expectation of some type of reduction in force, whether it be furloughs or layoffs, that must be implemented to pay for this. We also need to prepare our taxpayers to accept that we’ll be shifting more of their money that could have been used to better services provided to them, to pay for this increase to the Retirement Fund.
This policy change was a bad idea. It is the worst economic and financial policy since the creation of the DC plan in 1995. For the past year, certain senators have made up or exaggerated the fiscal condition or fiscal practices of my administration. In the same legislative session, one of these senators introduced an amendment to roll back salaries of certain unclassified positions totaling less than $1M, and yet so unashamedly voted to tag on an additional $173M to the unfunded liability. After what they did today, I never want to hear another lecture ripe with hypocritical grandstanding about fiscal management from them. They have just committed the employees and the taxpayers for the rest of time to pay more from their pockets.
I want employees and taxpayers – present and future – to understand that when this law came to be, their governor fought the good fight. I do not want my name associated with this tragedy.