Bureau of Budget and Management Research Director Lester Carlson said that the recently announced reduction of the government of Guam’s deficit from $83 million down to $1.5 million is unprecedented.
He said this is especially remarkable since a deficit of that size was cut down to its current amount in just two years, without borrowing, and in the middle of the worst public health and economic crisis of the century.
Governor Lou Leon Guerrero’s office issued a news release on Wednesday saying that her administration has almost erased GovGuam’s deficit.
According to the governor’s release, unaudited GovGuam financial statements for the year ended September 30th show a surplus of more than $46 million in the general fund.
According to Adelup that resulted in a reduction in GovGuam’s deficit from $83 million down to $1.5 million.
The governor spoke with Newstalk K57’s Patti Arroyo about what that means for Guam.
“What is the benefit of retiring our deficit? What that means is our cash flow will be better. And we are seeing it. And what does that mean about cash flow being better? We can meet operational needs quicker,” Leon Guerrero said.
She added: “I know we’re paying our vendors quicker. What does that mean? That means that money then goes back into the economy…to help businesses…and to help our people for a better quality of life.”
The governor said that retiring the deficit also means tax returns can be paid out sooner.
She said that retiring the deficit isn’t just good for the island, it’s also a historic achievement.
“Remember surplus for that year means we collected more than we spent. For a long time, we haven’t been able to do that. Now we have. Even in the first year, that we were able to retire the deficit by I think 40% to 50%…in 2020…in a year of pandemic…and a year where our tourism industry is basically zero…that we have a surplus. To me, that’s a great statement being sent to our administration,” Leon Guerrero said.
The governor credited her cabinet and directors with finding ways to save money by operating as efficiently as possible.
“Granted there’s a shortage of personnel…maybe some of the services aren’t as great as I’d like it to be…and we’re working on that. But to have this kind of financial stability in our government I think it’s amazing,” Leon Guerrero said.
She added: “And yes, you know you have the naysayers…you’ll have the opposition groups..you’ll have all those people out there…but we are focused as an administration…we know exactly what we need to do and we aim for it and we do it.”
The financial statements that show this deficit reduction still haven’t been audited.
According to Adelup, the statements won’t be considered definitive until the Public Auditor has completed his review.