Governor: GovGuam layoffs not the answer to financial shortfalls

Gov. Lou Leon Guerrero (PNC file photo)

Among the many federal dollars and issues being taken up by Adelup, Governor Lou Leon Guerrero has written letters to President Trump and key members of Congress, urging their support for legislation that would reimburse the Earned Income Tax Credit on Guam.

Leon Guerrero also wrote a separate letter to Congressman Michael San Nicolas, urging him to stay focused on the pursuit of this funding.

According to the governor, GovGuam has been petitioning for EITC reimbursement for years. And now, through the current proposed HEROES Act, she sees an opportunity to collaborate.

Loading the player...

The HEROES Act is the 2nd iteration of the Coronavirus Stimulus Packages (CARES Act). In the legislation, a 75% reimbursement of the cost of EITC is proposed. In her letter, Leon Guerrero wrote that she wants the feds to additionally top that up to 100% reimbursement.

The governor says she’s had previous conversations with Trump on the matter and that he expressed support for the reimbursement. She also separately reached out to Congressman San Nicolas to lobby for the money.

“I haven’t heard from him and I don’t know exactly what he’s doing over there in regards to the EITC. I have asked him to send me an update by August 3… we’ll see,” the governor said.

The congressman has responded, saying that while his congressional office has brought the federal reimbursement of EITC the furthest since its formal inception, the fact remains that GovGuam is obligated to pay the people what they are owed.

San Nicolas says he’s working to reverse this payment legacy from previous administrations, which included Leon Guerrero’s approval.

“I did vote for the EITC when I was Senator because I do believe that our people who are low-income and a bit marginalized should get the benefit of the EITC. The debate isn’t whether we should pay our people the EITC, the debate should be who is responsible for paying the EITC,” the governor said.

Guam has paid out nearly $750 million from its own coffers in EITC payments since the year 2000 in its obligation to mirror the IRS taxation system.

As for a Plan B should the HEROES Act not pass or if we don’t get 100% reimbursement as requested, Leon Guerrero says GovGuam is ready to absorb that cost.

“I have been very much in tune with what my expenses are as a government. I am very much knowledgeable about where our revenue sources are coming from. I’m very much knowledgeable about our collections – the collections are really good. We are seeing an increase in collections in comparison to previous administrations. We have been able to pay all the tax refunds,” the governor said.

Referencing recent jabs, the governor says GovGuam living within its means and to her, it doesn’t necessarily mean Adelup needs to lay off or furlough people and that she’s aiming to keep government worker employed as long as possible.

Just yesterday, the Republican Party of Guam issued a statement criticizing the government’s finances, saying the administration is overspending and not being truthful to the people about the need to cut back.

To this, Carlo Branch, the governor’s policy director, snapped back saying the GOP could have summarized their statement into one sentence: “A vote for (the) Republicans is a vote for furloughs and layoffs.”