Guam – The administration has lowered revenue projections for fiscal year 2011.
Simply put, Revenue Projections are the amount of money that the government is predicting it will collect in any given year. In addition to this, fiscal year 2010 ends on September 30th and GovGuam is already receiving millions of dollars less than it had anticipated.
The office of finance and budget held a budget meeting this morning to find out how much money GovGuam is predicting it will collect in revenues for fiscal year 2011. Today the administration presented a revised projection that is lower than what they at first predicted back in January. In January the administration released a revenue projection of $762 million dollars in fiscal year 2011. They are now predicting that they will collect $732 million in 2011. Senator Ben Pangelinan who has oversight of the budget process said, “My understanding though is the administration based upon the additional months of data now available after the January submittal is prepared to make some revisions to these numbers.”
The administration is now predicting that GovGuam will collect $30 million dollars less than originally predicted. Interestingly enough BBMR director Bertha Duenas has said they are anticipating a $30 million dollar shortfall for this fiscal year. The shortfall this year has led them to revise their projections for next year. Today however, representatives from BBMR said that GovGuam was on track to collect only $481 million dollars in revenues as compared to the $540 million that the budget is based on. That’s nearly a $60 million dollar difference. Senator Pangelinan however says that half of the $60 million is due to some complicated accounting. Basically $30 million dollars of the projected revenues are from the “making work pay credits”. Essentially, GovGuam doesn’t know how to calculate the revenue collected from these credits until all tax returns are filed and processed. “So the reason why the revenue of $540 is high is becuase it included this $35 million we got in cash will be recognized when the income tax refunds are processed so it will come back in at a later date,” said Pangelinan.
Nevertheless, former budget chairman Senator Eddie Calvo says it still appears as if there is a $60 million dollar shortfall. “I’m very concerned the tracking just shows baseline that there are major shortfalls.”
On the other hand Senator Pangelinan says that if we were indeed heading toward a $60 million dollar shortfall it would be nearly impossible to avoid payless paydays or layoffs.