How to Wreck the Economy: Senators tiptoe through health insurance, ignore advice to reduce deficit

by | Aug 3, 2018 | Press Releases | 0 comments

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Aug. 3, 2018 

Hagåtña — Even after repeated statements in session from the Department of Administration that tax amnesty payments should be used to reduce the deficit – which can prevent a repeat of triple digit deficits of the past – Senators want to appropriate it.  

In previous years, the government has had a deficit as high as $500 million, which also is a time when tax refunds weren’t paid for years. Moreover, these collections from tax amnesty are revenues of FY2018, not FY2019. 

DOA Director Edward Birn has said that if Senators appropriate funds from amnesty, additional deficit reduction will be delayed.  “In cash terms there is no difference. An unpaid bill on September 20, 2018 increases the deficit. You still need funds to pay it. And if you use the funds to pay 2019 expenses, onSeptember 30, 2019 — you will still have the same liability.”

Without that funding solution for FY2019, they’ve been looking for ways to reduce costs even more. 

This scurry for funding was caused when 11 Senators repealed a law that already had a budget solution to the General Fund shortfall created by the federal tax policy. 

It’s exasperating. Senators have to look at the bigger picture. Already, their actions have wrought negative reactions from rating agencies. Even local businesses, such as NetCare, don’t want to do business with the government of Guam after Senators stripped away a solution.  

Senators discussed health insurance for thousands of government of Guam employees, retirees, and their families during yesterday’s session. They asked DOA Director Edward Birn about GovGuam’s employee/employer contributions and how GovGuam compared to private companies’ health benefits. 

Director Birn shared information about previous years’ contracts — noting that health insurance costs differ from business to business. Companies that offer health insurance – reminding Senators that of an ongoing protest on the health insurance under negotiation contract he is restricted in his comments. 

Sen. Frank Aguon wanted to put a cap on the insurance cost. Senators have been informed that doing so could mean a reduction in benefits. Additionally, any cost beyond that cap will have to be borne by the employee or retirees.  

Vice Speaker Therese Terlaje and other senators suggested that GovGuam not delay and entrench itself and fight the protest, and consider moving forward with new procurement so a cost can be determined for budget purposes. Budgets are an estimate of costs to be incurred and normally its based on historical costs. The revenues are estimates. The “actual cost” is normally determined at the end of the year – as fees and taxes are collected throughout a year and not collected all at once on Oct. 1.  

Don’t take our word for it: 

Sen. BJ Cruz on the health insurance stated: “The contract has been signed in September every year since I had chairmanship. So, we can decide to wait until it’s done and not have a budget – and we probably wouldn’t even be able to get a budget even by November or December if we wanted to know an exact number – I didn’t want to admit that, but I’ll admit it at this point. My predecessor had a good plan with a timeline, but we got to move a budget through and the only number we have is the previous year’s budget.”

One of the Legislature’s two jobs is passing a budget. Contact the Senators today and tell them that the Legislature needs to pass a responsible budget.  

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