NEWS: Reducing budget cuts DOC to the core
Option 2 was painful, Option 3 is worse – Don’t Take Our Word For It
July 10, 2018
“All of you attended, well most of you attended, the public hearings (but) I didn’t even look at Option 2.”
Speaker BJ Cruz made that statement in session as senators discussed repealing the sales tax — without replacing that funding source to fill the General Fund gap caused by the federal tax cuts. Prior to this, agencies presented their Fiscal Year 2019 budget based on two options — the first anticipated that local senators would have found a way to fill the revenue shortfall. The second option assumed senators wouldn’t find a revenue stream.
Even armed with this information, Senators Tom Ada, Frank Aguon Jr., Dennis Rodriguez Jr., Telena Nelson, Regine Biscoe Lee, Joe S. San Agustin, Therese Terlaje and the bill’s author, Michael San Nicolas. Republican Sens. James Espaldon, Mary Torres and Fernando Esteves repealed the sales tax — which also stripped away $40 million for the Guam Memorial Hospital and the Department of Education. And they didn’t put forth a revenue source to address the shortfall.
Speaker Cruz recently introduced two bills that could help fund the shortfall that the Office of Finance and Budget has said is real. Otherwise, as he stated during session, some hard decisions on what cuts will have to be made as the Legislature provides a balanced budget.
The Department of Corrections’ current fiscal year budget is already a challenge – they lack the full funding for the health clinic and are short for meals. But the next fiscal year’s budget is worse, particularly for Options 2 and 3.
Option 2 was based on the estimate of the General Fund revenue impact at about $67 million. That shortfall, according to the Legislature’s Office of Finance and Budget, is closer to $160 million – which is the basis of Option 3.
• Option 1 is based on a balanced budget that requires all agencies to live within the financial in spite of DOC’s request for an additional $3M to fully fund meals and the health clinic. While not easy, DOC will work to live within this budget.
• Under Option 2, DOC lacked funding for fixed costs — like meals for the inmates.
• Under Option 3, DOC doesn’t have funding for meals or the health clinic at all.
Options 2 & 3 push DOC backwards and brings the agency back to a place where it may face a very costly federal receivership.
OPTION 1 IMPACT: $25.1M General Fund + $1.6M Special Funds
• GMHA Agreement: $898,935 shortfall – possibly reduce medical services for prisoners – risking federal receivership.
• Food Services: $1.6M shortfall – making it tough to find a vendor.
Personnel: Retains some hiring ability – possibly 4 positions.
• GMHA Agreement: Not funded – no medical services for prisoners – risking federal receivership
• Food Services: $2.6M shortfall (only $726,786 remaining for the contract)
• Personnel: 10 vacant uniformed positions unfunded, resulting in shortage of manpower, and will require officers to work overtime.
• Overtime: The 10% level for OT will be insufficient.
GMHA Agreement: unfunded – which means no health services at all for prisoners.
• Food Services: No funding means no meals for prisoners.
• Personnel: Holiday and night differential for positions that qualify for these special pay is not funded. AND more than 35 vacant uniformed positions will go unfilled, which will increase the need for officers to work overtime.
• Overtime: No overtime funding.
• Utilities: Utilities will have to be reduced.
Option 3 is based on a budget without a revenue source to fill the revenue shortfall caused by the federal tax cuts. This option would leave DOC would not be equipped to house inmates and detainees, or provide health services, or rehabilitative programs – in fact their job would be nearly impossible.

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