(Hagåtña) – The federal Tax Cuts and Jobs Act of 2017 was designed to stimulate the American economy. The unintended consequences of this federal mandate is a reduction of roughly $67 million for the remainder of this fiscal year for the Government of Guam.
Public hearings were held Wednesday discussing two bills – Governor Eddie Baza Calvo’s Bill 245-34 and Speaker Benjamin F. Cruz’s Bill 244-34. Both bills intended to address the revenue reduction caused by the federal reform.
Governor Calvo’s bill addresses the revenue loss and provides a dedicated funding source to our island’s only public hospital, and includes a provision for the Guam Department of Education (DOE).
The Governor introduced Bill 245 on Feb. 14 and called the Legislature into session that same day. In that session, Speaker Cruz announced the scheduled public hearings for Feb. 21, and that it is his intention to convene session as soon as the following Friday, Feb. 23, in an effort to move on the measure “post haste”. It is appreciated that the Speaker recognizes the sense of urgency and the impending crisis our government could face if no action is taken soon.
Passing Bill 245 stabilizes the government without jeopardizing the livelihoods of thousands, including students and teachers at DOE. It also provides our only public hospital with a desperately needed funding source. It is our moral responsibility; we can’t allow our people to suffer any longer. Doing nothing means you have failed the sick, suffering, and the dying.
Additionally, salary reductions could mean an exodus of valuable and knowledgeable employees.
Cutting to the bone
In discussions last year, prior to the Legislature approving its version of the Fiscal Year 2018 budget, various government agencies, to include Guam Police Department, Guam Fire Department, Department of Corrections and Guam Memorial Hospital pleaded with senators for funding. Senators passed an incredibly conservative budget that cut into the operations of the agencies.
Last month, BBMR sent a letter to all government agencies and branches that receive General Fund monies for different options. “We’ve asked our agencies to see if there’s any way to reduce costs and find ways to enhance revenues,” said Lester Carlson, Acting Director of BBMR.
“Make no mistake about it, if the cash does not come in, vendor payments will suffer severely. We worked 2 years to get them down from 180 days to 90 days, and if we don’t do something soon, debt age will be extended,” said Vince Arriola, Deputy Director of Department of Administration.
“We keep talking about cost reduction. We were at this level and then you brought us down to another level …That’s the budget you came up with last year. And right now we are at bare bones,” said Marie Benito, Department of Revenue and Taxation deputy director.
Pass Bill 245-34.