New money is the name of the game as the Leon Guerrero-Tenorio Administration takes the reins of government. In accordance with their platform, the duo is about to embark on a four-year course of fiscal accountability and economic rejuvenation, previously charted over the months leading up to their election and inauguration. Stepping into elected office, however, Lou and Josh will have to hold tight to silver linings.
Guam – In business and in politics, we win and lose—and live and die—by the numbers. And lately the numbers look a little less than promising on Guam.
On Friday U.S. Department of Interior-affiliated Crawford & Associates governmental CPA’s released an independent “Performeter” statistical report showing FY17 ending in a deficit of $889.5 million—all elected officials’ claims of FY17 budgetary surpluses notwithstanding.
Just after Christmas, University of Guam Economist Dr. Maria Claret Ruane reported mere fractional percentage growth of 0.5, 0.3, and 0.2 percent over the last several fiscal years. Until new numbers arrive, Dr. Ruane said foresees zero growth in 2018 and possible negative growth this fiscal year.
But back to silver linings.
The upshot could be the collection of early signs that Lou and Josh are already putting their money where their mouths are—having named every member of their Fiscal Accountability Team by one week before Monday’s inauguration. And it’s a team brimming with education and experience, youth and vitality, and the wisdom of riper years.
Now, if the administration can demonstrate the will, imagination, and follow-through to attract and sustain right-fit investments for Guam, Lou and Josh will also create those coveted, promised jobs and drive the circulation of more revenue within the island, as a partial foil against some of the cash outflows sometimes siphoned off by outside contractors and foreign investors.
And with slowdowns in the regional economy likely to affect visitor arrivals, it’s the localized economy of wider small business transaction where Dr. Ruane sees the most immediate growth potential.
Naturally, she encourages the development of more agriculture on Guam’s fallow fields, and the sale and purchase of products from local businesses throughout 2019.
As for outside investment, Guam appears poised to glean a good hunk of a $6.1 trillion nest egg just waiting to hatch. The U.S. Treasury Department’s Opportunity Zones program seeks to free up that much money in capital gains for tax-deferred investments in special Opportunity Funds, or equity funds that invest in economically disadvantaged communities called Opportunity Zones.
With nearly a quarter of Guam’s population living below the poverty line, the island is literally riddled with Opportunity Zones—25 in all—running the length of the island, north to south. And last fall Lou and Josh hosted Jobs Act expert Brett Parker to brief the media on an Opportunity Zones program that could spur the development of low-income homes, grow small businesses, and expand employment.
Longer term economics must factor in the paradigm shift of Pacific force realignment and the ramp-up and finalization of the US military buildup on Guam. Tons of construction supplies will be traversing Marine Corps Drive from the Port in the south to buildup areas such as the Marine Corps cantonment on Route 3 in the north.
And literally thousands of more people will be living on island, including 5,000 rotational Marines, plus their dependents, plus the personnel and employment openings that will need to be filled to meet construction demand and daily living needs and lifestyle expectations. And then there are the inevitable infrastructure upgrades and sustainable expansion that must result from the next phase of visitor industry development and a significant population increase.
Lou and Josh may have their work cut out for them, but all signs so far seem to point in a new direction toward accountability and competence at the highest echelons of government.