Governor Vetoes Bill 514, and 529 and Line Item Vetoes Portions of Bills 511

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 Governor Eddie Calvo has vetoed bills 514 and 529 and ecercised his organic act powers to line-item veto specific portions bill 511.

 

Honorable Benjamin J.F. Cruz
Acting Speaker
Thirty-first Guam Legislature
155 Hesler Place
Hagatna, Guam 96910

Attached is Bill No. 511-31 (COR) entitled, “AN ACT TO AMEND § 2590, Repeal and reenact § 2951, amend §§ 2952 through 2954, add a new § 2954(a), and amend § 2955 through 2960 all of Chapter 2, Article 10, title 10 guam code annotated, relative to updating the adult protective services’ mandates”, which I have signed into law as Public Law No. 31-278.  However I have exercised my authority under Section 1423i of the Organic Act of Guam to line-item veto one area of the legislation concerning the appropriation of money.

I commend the author for her leadership and compassion in establishing policy to care more deeply for the abused and neglected manamko within our community. We are nothing in our culture without our elders.

P.L. 31-278 seeks a robust Adult Protective Services (APS) division within the Department of Public Health and Social Services. I agree that such a division should exist, as the current structure simply lacks the resources to effectively complete its mission.

I have, however, been compelled to line-item veto the appropriation of funds from the General Fund as contained in proposed amended Section 2960(a). This appropriation from the General Fund would have funded new positions at APS, along with office space, cell phones, and other new obligations. Policymakers and citizens can debate the priority placed on incurring these new obligations over paying our existing deficit, however, my main reason for the line-item veto is that this appropriation of an absolute value when the mandate is carried out has no funding behind it. Because i Liheslatura has appropriated all of the funding from the General Fund for operations, the new appropriation from the General Fund contemplated by proposed amended Section 2960(a) is flawed absent a corresponding de-appropriation elsewhere, or an increase in revenue to the General Fund.

The intent of i Liheslatura to create the new APS division is approved and has become law, however, actual implementation will be determined by i Liheslatura should it decide to fund this mandate. Had I not line-item vetoed this one area of the bill, it is estimated the deficit would have grown by approximately $500,000.00.

As I wrote in my veto of Bill No. 529:

“The government of Guam still owes millions of dollars to taxpayers, vendors, and its own employees. These obligations comprise the deficit, a deficit that came to be from two decades of appropriation after appropriation without regard for the debts that were growing older each day.

As you know we recently settled our obligations on error-free tax refunds. We then moved on to another part of our debt: merit bonuses owed to line agency employees since 1991. Not only does this government still owe merit bonuses dating back to 1991 to ex-employees of the line agencies and current and ex-employees of all other agencies and the Judiciary, obligations remain to vendors, law enforcement owed the balance of their pay adjustments, increments, civil service back pay, promised compensation… the list of bills on this deficit goes on and on.

This deficit came to be when those responsible for appropriating and spending taxpayer money either appropriated sums greater than the cash collected within a year, or altogether ignored mandates and entitlements, or a combination of both. Conversely, we have reversed this trend over the past two years working with the legislature by collecting more revenue than we projected, and by reducing operational costs. The cash that we saved from these policies went to pay down our bills. We still have a long way to go.”

Thank you for your consideration of the people to whom this Government continues to be indebted.

Senseramente,
EDDIE BAZA CALVO

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Honorable Benjamin J.F. Cruz
Acting Speaker
Thirty-first Guam Legislature
155 Hesler Place
Hagatna, Guam 96910

Dear Mr. Speaker:

Attached is Bill No. 514-31 (COR), entitled, “AN ACT TO AMEND ITEM (II) AND REPEAL Item (iii) of §1512.3(a)(2)(B) of article 5, chapter 1, title 5, guam code annoated, relative to prioritzing the payment of income tax refunds with the remaining eighteen million dollars of series b bonD proceeds”, which I have vetoed.
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I am sure i Liheslatura was unaware that this $18 million did not exist when it voted to pass this measure. If it did, I assure you that such cash reserves would have been used to pay down our rather large deficit.

There may have been confusion about this amount because of the long and sordid history behind this phantom fund of $18 million. I am thankful you have given me this opportunity to one again remind i Liheslatura about this history.

Last year I introduced a biennial budget to adequately address the operational costs of the Government for fiscal years 2012 and 2013.  That budget fully funded government employees’ and retirees’ health insurance using General Fund revenues. This would have been the proper way to fund this cost. Instead, however, i Liheslatura chose to discard the budget plan and instead increased appropriations to other areas, including a pledge of $18 million of “funds” from the Guam Waterworks Authority (GWA) to supplement the cost of health insurance in Fiscal Year 2012.

GWA disputed this appropriation, as it had not itself appropriated the $18 million in revenue to the General Fund. As a matter of fact, this dispute was the subject of a legal battle.  In short, the money never existed for i Liheslatura to appropriate.

To rectify what became a messy situation, i Liheslatura decided instead to take $18 million meant for tax refunds out of the Series B bonds I was pursuing and use it to pay the impending balance of the health insurance bill. Those bonds were authorized, floated, and the proceeds used to pay their intended purpose. Thus the long saga surrounding this $18 million hole in the budget process ended.

You can therefore imagine my surprise when Bill 514-31 was introduced, suggesting that $18 million was just lying around.

I Liheslatura may have entertained this measure under the assumption the government is $18 million delinquent in the payment of tax refunds. Quite the contrary and in line with our consistent fiscal policy prioritizing refunds, all error-free refunds have been paid to the people. Much less than $18 million remains for error- and suspended returns, which taxpayers must correct before receiving their claim.

I respectfully repeat the position of our administration, one that is indisputable and in stark contrast to the fiscal policy of the Government 20 years before our assumption to office: We do not require a court or a legislative body to tell us to pay tax refunds. We prioritize these payments because it is the right thing to do. Thank you, however, for cheering on this effort through this legislation and through other public pronouncements made over the past few months. It is certainly laudable that now all senators are in agreement with our administration that tax refunds do not belong to the Government and should be timely paid. I ask only that you support our fiscal policies – some of which are not always popular – that provide us the financial flexibility and cash savings to pay our debts, especially tax refunds.

Senseramente,
EDDIE BAZA CALVO

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Honorable Benjamin J.F. Cruz
Acting Speaker
Thirty-first Guam Legislature
155 Hesler Place
Hagatna, Guam 96910

Attached is Bill No. 529-31 (COR) entitled, “AN ACT TO AMEND § 66104.2 of chapter 66, title 10, guam code annoTated, relative to the employment of civilian volunteer reserve officers”, which I have vetoed.

The Government of Guam still owes millions of dollars to taxpayers, vendors, and its own employees. These obligations comprise the deficit, a deficit that came to be from two decades of appropriation after appropriation without regard for the debts that were growing older each day.

As you know we recently settled our obligations on error-free tax refunds. We then moved on to another part of our debt: merit bonuses owed to line agency employees since 1991. Not only does this government still owe merit bonuses dating back to 1991 to ex-employees of the line agencies and current and ex-employees of all other agencies and the Judiciary, obligations remain to vendors, law enforcement owed the balance of their pay adjustments, increments, civil service back pay, promised compensation . . .  the list of bills on this deficit goes on and on.

This deficit came to be when those responsible for appropriating and spending taxpayer money either appropriated sums greater than the cash collected within a year, or altogether ignored mandates and entitlements, or a combination of both. Conversely, we have reversed this trend over the past two years working with i Liheslatura by collecting more revenue than we projected, and by reducing operational costs. The cash that we saved from these policies went to pay down our bills. We still have a long way to go.

I support the idea behind Bill No. 529. I think we should do whatever is reasonable and affordable to retain and attract civilian police reservists to augment the active police force in meeting the mission of the Guam Police Department (GPD).

However, the law conflicts with the minimum qualifications law that establishes the qualifications to be a police officer in the Government of Guam.  And, while reducing the requirement of hours so that GPD can attract more reservists is a great idea that is supported by GPD officials, the provision  requiring the government to provide health insurance benefits may cost taxpayers an estimated $300,000 to fund these entitlements for the anticipated additional part-time reservists. Police Chief Fred Bordallo has estimated that passage of Bill No. 529 into law would bring the reserve force up to about 150 reservists.

Not only is this an unfunded mandate, it is a new obligation. The proposed legislation mandating reservists to insurance coverage would have been a new entitlement, a new cost, and a new reason and unjustified reason to again ignore this government’s existing debts to its employees, taxpayers, and vendors. Again, it is a great idea, but one we simply cannot afford.

If i Liheslatura decides this entitlement is a priority, then I ask senators to cut appropriations elsewhere in order to pay for this. But before such an action, I ask that you consider that in the police department alone officers still are waiting for their remaining 20 percent salary increase, some are owed other compensation, all are sacrificing much more than they should with the inadequate resources they have. If i Liheslatura is to identify up to half-a-million dollars in funding cut from an appropriation elsewhere, it may be prudent to consider such funding can pay outstanding bills to the active police officers, or to hire more full-time officers rather than spending this money on insurance. As it stands, passing this into law will render the current budget unbalanced, increase the deficit, and subject the government to a new round of possible civil liability against it.

I was compelled to veto it in good conscience.

Senseramente,
EDDIE BAZA CALVO