Adelup: $135-Thousand Saved From Pay Cuts, Deposited Into Tax Refund Account

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Guam – The 10% pay cut that the Governor ordered for Senior Administration staff  in August of  last year has netted $135-thousand dollars for the tax refund account, says a releasse from Adelup.

The Administration was responding to a suggestion by Majority Leader Rory Respicio who cited the Administration’s own staffing documents for his statement that the pay cuts had been reversed.

The release from Adelup states that the 10% cut remains in effect and the $135,000 dollars saved and paid into the refund account by the Governor, the Lt. Governor and other senior staff  makes them “the only officials to personally contribute to tax refunds.”

READ the Administration’s release in FULL below:

Pay Cuts at Adelup Amount to $135K for Refunds
This month marks one year of Governor, Lt. Governor & senior staff pay cuts

FOR IMMEDIATE RELEASE
August 1, 2012

August 2012 marks a year since the Governor, Lieutenant Governor, and their senior staff cut their pay by 10 percent. They did this for two reasons:

1.     They weren’t going to ask GovGuam employees to make sacrifices without making personal sacrifices themselves.

2.     They wanted to dedicate these cash savings to pay more tax refunds while the people were suffering without their refunds.

By August 28, 2012, the island’s top officials will have deposited about $135,000 of their earnings into the tax refunds account. This makes them the only officials to personally contribute to tax refunds. It also counts them among the thousands of GovGuam employees who’ve been making sacrifices since the Hay raises and increments were halted.

“Every dollar saved counts, especially in the fiscal environment we’re in,” Governor Calvo said. “We can’t lead if we’re not setting the example.”

“We have a plan to cut upwards of about $75 million from annual spending,” Lt. Governor Tenorio said. “We want to assure the people, especially the GovGuam workforce, that before any of these cuts were even proposed, we had cut our own pay.”

Statutory Authority to Cut Elected Officials’ Pay

The pay of the Governor and Lieutenant Governor, just like senators, is set by law. When the Governor and Lieutenant Governor first ordered that their pay be cut, the Department of Administration said they did not have the statutory authority to do so. This meant they could not lower the Governor’s salary from $90,000 to $81,000 and the Lieutenant Governor’s salary from $85,000 to $76,500.

The Governor then asked if elected officials can instead deduct the 10 percent directly from their pay checks and direct the deduction to the tax refunds account. DOA made the accounting deduction directly from the Governor and Lieutenant Governor’s paychecks into the tax refunds account. That money has gone to pay tax refunds, which in essence reduces the accumulated deficit.

More interestingly, because DOA cannot alter the amount of the Governor and Lieutenant Governor’s pay set by law, the two leaders have been paying taxes on the higher amount, then the cut is deducted.

“Any elected official can do this,” Director of Administration Benita Manglona said. “You can see my staff and we can help to set up the accounts for this. It’s like making a payroll deduction for a good cause.”