VIDEO: Governor Calvo Defends Handling of GovGuam’s Bleak Financial Picture

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Guam – Governor Eddie Calvo defended his administrations bleak financial picture, and his need to reverse the Hay pay raises Wednesday before the Association of Government Accountants.

The governor pointed to the office of public accountability’s latest audit of Gov Guam wide finances.

“From the initial findings it’s come very close to what we believed was so that the financial condition for the government of Guam at least for FY 2010 had deteriorated to a point of about a deficit of 83 million dollars,” said the Governor.

2009 also showed a deficit of 60 plus million the governor says this means there are two fiscal years worth of deficits that are now affecting this fiscal year.

These are two years worth of budgets that the governor did not vote for as a senator. The governor says it’s because of these prior years that Gov Guam is now struggling to make ends meet. “I hope you all as accountants understand why we had to reverse the hay study it’s not because of a want it’s not because of a belief I do believe that our workers need to be paid more,” said Governor Calvo.

The governor says it’s simply comes down to math, math that he says shows that GovGuam can’t afford to pay certain things like the hay raises. So what does the governor think GovGuam should do to improve it’s fiscal condition? “There has to be aggressive revenue enhancement and no that doesn’t mean tax increases,” said Governor Calvo.

Instead what that means is aggressively collecting taxes from business who aren’t paying. “There is a shadow economy in this island there is no doubt about it,” explained the Governor adding, “This government will ensure that every business coming to Guam will get a license and will pay taxes.”

The Governor says this has happened numerous times in the past. “If there is a business being conducted on this island and they have not gotten their license and they have not paid their taxes then they will cease doing business on guam,” said Governor Calvo.

Without releasing any names he even gave an example of a company who did just this. “When a company from kentucky is doing trenchwork at a road outside of the base, public road, and says that they don’t have to get a license to do business which may have happened in the past it isn’t gonna happen now,” said Governor Calvo.

To accomplish this the governor has spoken to various federal entities to ensure that DOD works with GovGuam on identifying all of their contractors that do work on Guam. Also, the governor said Rev and Tax will be hiring 30 individuals to help collect taxes. These are some of the kinds of things the governor said he spoke to Standard and Poors about this morning. There was no explanation of what the meeting with Standard and Poors was about and he did not go into details.

As for the next fiscal year governor, Calvo says he’s submitted a very conservative biennial budget that will allow them to segue into performance based budgeting.