Governor Calvo Suspends Hay Study Pay Increases for GovGuam Employees

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Guam -In a statement late Wednesday afternoon, Governor Eddie Calvo announced that he is suspending the Hay Study pay increases for all GovGuam employees.

Calvo says he doesn’t know why the Camacho Administration decided to immplament the Hay Study, but he called the decision “an empty promise” adding that “the government can’t afford it” and “now our hard-working government employees will have to shoulder the burden of that empty promise.”

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Read the Governor’s Address in full below:

My fellow Guamanians,

I don’t have very good news about your government tonight. I’ve made some decisions so that the public schools can stay open this year, the hospital can have medicine, and so that those most in need do not have to suffer more than they already are.

Our finance directors are continuing to assess the government’s cash position for this fiscal year. Their preliminary reviews disclose that there is no apparent course of action that will result in positive FY 2011 cash balances as reported by the prior administration to the Transition committee. Some time over the next nine months, we may, quite frankly, run out of cash. If we do, we will not be able to pay employees, run the hospital, keep schools open or help the needy.

If we do not close this cash gap, those in need will suffer the most. It will negatively affect Mental Health, COLA, the hospital, and non-profit organizations like Catholic Social Services and Sanctuary. This is money to feed the homeless, shelter abused children, help victims of domestic violence, assist the elderly pay for their medication, and to aid families struggling with disabilities. We can’t leave these people behind. We can’t turn a blind eye and watch them suffer as the money runs out. And we also can’t keep holding your tax refunds.

Ray and I are keeping our promise and are taking immediate actions. We had to act today, because I refuse to shut down the government or to have a mass layoff of teachers, police officers, doctors and other professionals of the government.

Ray and I are issuing further orders to cut costs. We are directing all agencies to reduce the cost of electricity by at least 10 percent. Paper reduction through greater use of digital communication, double-sided printing and recycling will be mandatory. We will authorize audits of fuel expenses and the use of 24-hour vehicles. We will be investigating the consolidation of office space to save on rentals. And as of today, the Hay Study is suspended.

I cannot speak to the reasons our predecessors decided to implement the Hay plan based on the financial information we have before us today. All I know is that it was an empty promise, the government can’t afford it, and now our hard-working government employees will have to shoulder the burden of that empty promise.

These actions do not include further cost cuts that will be made when agency directors submit their assessments this month. We expect further containment of spending through innovative ideas. This includes the health insurance liability. We are looking at ways to reduce the cost of health insurance. There are legal issues we must address first… we need to determine whether, legally, this can be affected.