Governor vetoes budget bill; calls for special session on Monday

Gov. Lou Leon Guerrero (PNC file photo)

After last-minute attempts at a compromise, Gov. Lou Leon Guerrero has vetoed the Legislature’s recently passed fiscal year 2021 budget, calling for a special session on Monday for senators to tackle an alternative budget bill that Adelup has submitted.

Today was the last day for the governor to sign or veto the budget bill.

In a letter to Speaker Tina Muna-Barnes, the governor said that after thorough and careful consideration, she is “forced” to veto Substitute Bill No. 282-35 (LS) — the FY 2021 budget bill.

“It is my hope that together, our branches of government can mutually agree on a budget that serves the People of Guam while still being realistic and responsible,” Leon Guerrero said.

According to the governor, the long tradition of veto messages would normally require her to paint a picture of horrors all potentially caused by the Legislature’s spending plan.

“But we do not live in traditional times and the normal political bickering between our branches serves no one, Guam is involved in a life or death struggle for the health of our people—that is the only fight that matters right now,” Leon Guerrero said.

The governor said she vetoed the bill because Adelup and the legislature can do better and should try again.

She said Adelup is submitting an alternative proposal for consideration by the Legislature.

Pursuant to her authority under the Organic Act of Guam, the governor is calling for a special session of the Legislature, to commence at 10 am on Monday, September 14, 2020.

“I recognize that the statutory framework that governs the legislature’s actions and sets conditions for passage of a bill without a public hearing instructs that you certify the existence of an emergency and waive the public hearing requirement set out in local law. However, the Organic Act imposes no such limitations on my authority to call a special session if it is in the public interest. In accordance with 48 U.S.C. §1423h, the purpose of this session shall be consideration of my appropriations proposal,” Leon Guerrero said.

The governor acknowledged that the legislature would be forced to adopt revenues
very different from those submitted in Adelup’s original proposal.

“Recognizing right as well as reality, I accepted revenue projections for the General Fund which were more than $50 million lower than my pre-public health emergency request. And in the final tally, the projections I propose and those adopted by the Legislature differ by a mere $7 million—an amount less than a fraction of 1% of all revenues available for appropriation,” Leon Guerrero said.

She added: “Though I share the legislature’s desire to project conservative revenues in an uncertain environment, these projections must be based on math, and not on fear.”

The governor insists that the Consolidated Revenue and Expenditure Report clearly indicates that actual withholding collections exceeded projected levels even after netting out collections resulting from federal unemployment assistance received and the same is true for corporate tax collections.

This issue has been a sticking point in Adelup and the Legislature’s revenue forecasts.

“While I acknowledge the difficult choices made by the budget measure placed on my
desk, it is clear that the local appropriation to the Department of Public Health and Social Services is insufficient to maintain the level of services in demand during these trying times. Payroll for pandemic front line personnel who were in-process, or in active recruitment, prior to the budget’s passage will be in jeopardy,” Leon Guerrero said.

As late as this morning, the governor and the Legislature were still trying to arrive at a compromise that would give more funding to public health to address this very issue.

Senator Therese Terlaje, who heads the health oversight committee, already said that she managed to give enough funding to Public Health during the three-week budget session.

But the governor said she cannot understand why the Legislature would voluntarily forfeit millions of dollars in Medicaid money “because we choose not to find matching funds.”

“Contrary to popular belief, the transfer authority granted to me in the measure as vetoed does little to address any major concerns because agency appropriations are so bare-bones throughout the executive branch there is nothing to transfer from one entity to another,” the governor said, referring to a provision in the budget bill limiting her transfer authority.

“The same is true for the continuing/carryover provisions strewn throughout this measure that are generally not backed by current year cash. Where the cash for a carryover or continuing appropriation is present no problem may exist; where it does not, the amount is added to our deficit—straining our cash flow and amounting to nothing more than an empty promise,” she added.

The governor pointed out that the differences between Adelup and the Legislature center around three central items: a less than 1% difference in revenues; the allocation of the revenues on which they do agree on, and what the governor described as “burdensome reliance” on carryover and continuing appropriations to make up for those revenue differences.

“None of us should be satisfied with the budget proposals before us. These fiscal plans are all driven by revenues that shortchange good people doing Herculean work for the betterment of our community. The damage caused by COVID-19 is real and that damage is being felt by too many people in too many ways. The reasonable and responsible adjustment to the revenues as I have proposed will have far-reaching and positive cascading effects in closing the budgetary gap and preventing further deficit growth,” the governor said.

She added: “That said, I am certain that if the three central differences I have outlined above can be resolved, we will meet the most critical needs of our people through a realistic budget that I will most certainly sign.”