Governor to Senators: Find a solution, don’t choose politics over doing your job
Legislature needs to find solution to revenue shortfall Senators choose political grandstanding and media sound bytes over doing their job
July 3, 2018
Hagåtña — The Senators who decided to strip a source of funding for government operations, the Guam Memorial Hospital and the Department of Education now need to find a solution.
The Governor’s legal and fiscal teams are reviewing the bill that would repeal Public Law 34-87 and its impact to the operations of our government in Fiscal Year 2019, which starts in October.
Even after being warned by the Governor, the Legislative Speaker, economists and the fiscal team, 11 senators voted to repeal a sales tax WITHOUT PROVIDING A SOLUTION, placing the government in a tenuous financial position. The Legislature now has to figure out where to cut up to $160 million in government services, help DOE with school maintenance and CIP projects, and help GMH fill a shortfall that is currently causing delayed payments to vendors, the Retirement Fund, and other obligations.
“We have a hospital that for 40 years hasn’t received the funding it needs to meet its mandate, we have nearly $100 million in deferred maintenance at public schools, and a revenue shortfall of up to $160 million – according to the Speaker – in the upcoming fiscal year for government operations,” Governor Calvo stated. “Repealing the source of funding for the schools, hospital and our government is leading our government into a catastrophe.”
The Governor’s fiscal team, in response to questions from the media, last week said a repeal of the sales tax amounted to a possible 1,500 government jobs. The Department of Labor Chief Economist said the repeal would disrupt the island’s economy — as government employees wouldn’t be able to eat out, shop, or buy cars from the private sector.
As GovGuam goes, so the goes the economy.
Yesterday, Speaker Cruz warned his colleagues that shortfall in revenues caused by the federal tax cuts is real and a revenue source is needed to cover the gap.
“There are some real tough times ahead … I assure you that the revenue loss is at least $120 million and close to $160 million if not more,” the Speaker told Senators. “How are we supposed to raise the revenue?”
“All of you attended, well most of you attended, the public hearings,” Speaker BJ Cruz said, noting that the Administration submitted two options for the Fiscal 2019 budget – one with a funding source addressing the shortfall created by the federal tax cuts policy and a second option that is without.
“I didn’t even look at Option 2” Cruz said noting examples like the Department of Corrections budget under Option 2 lacked funding for fixed costs, like feeding the inmates. He said Senators need to help him find areas of public service to cut if they don’t provide a solution.
“Tell me where you think you’ll be able to support cuts. Do we take the OPA’s recommendations?” the Speaker asked. “Who’s going to make the first motion on this floor with her last audit?”

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