Guam – The Guam Department of Education has rolled out phase one of its cost cutting measures needed due to the Trump tax cuts.
GDOE has been asked by the Bureau of Budget Management and Research to cut some $19.6 million from its budget. GDOE Superintendent John Fernandez says round one is comprised of the easy cuts to deal with but he warns round two may have more serious consequences, including affecting personnel.
“$19.6 million, you round it to $20 million. That’s about 8.9 or 9 percent of our total general fund appropriation. However, because we are at almost at the halfway point of the fiscal year it actually is more of a 15 percent cut to the budget for the remainder of the fiscal year,” said Fernandez.
After soliciting input from stakeholders Fernandez says he and his management team came up with round one of their budget cuts. Round one includes the conservation of power and water, hiring freezes, procurement contract freezes, the limitation of overtime, delaying the start of the expansion of the pre-k program, the leasing of certain properties to other GovGuam agencies, budget cuts to charter schools and redirecting money set aside for lease back payments of the renovation of Simon Sanchez High School and other schools to the central GDOE offices.
The Simon Sanchez renovations have been stalled by procurement protests, so the construction hasn’t begun and thus the money set aside for the leaseback payments should be available for other things.
“However, because the process has stalled, and the funds are not being utilized for the lease, because no project has been completed and we’re at least two years away, we’re asking the government and the agencies and the legislature to determine what the amount is in that reserve account. And be able to utilize that to offset some of the cuts we have to make,” said Fernandez.
The GDOE superintendent says these leaseback funds are estimated to be around $5 million. The other round one cost cutting measures should save GDOE about $9 million for a total of $14 million.
“So round one is really what we call the low hanging fruit. These are measures that again if you had to deal with this in your household the first thing I think everyone would do is let’s take the immediate measures that are gonna be easy to take that will contribute to savings, forego new spending and so forth. And after we do that take a look at round two which is starting to dig into the meat of the agency with regards to our core operations and personnel that are already in positions,” said Fernandez.
While round one focuses on the easiest of cuts, it is round two that could hurt. Round two will have to cut a little deeper to save the additional $4.6 million necessary to reach the $19.6 million-dollar figure GDOE has been tasked with cutting.
“Like the superintendent said, the math is easy but the consequences might be difficult for people to bear,” said Guam Education Board Chairman Mark Mendiola.
Those consequences include the possibility of cutting hours and as a last resort closing schools and cutting personnel. Some of the schools they are looking at closing down and consolidating include schools like J.P. Torres Alternative School and other schools that have low enrollment numbers.
In addition to the cuts, Fernandez has recommended a .5 percent increase to the business privilege tax or gross receipts tax with a five-year sunset provision. He says this should generate roughly $150 million that can be used for school facilities.