GovGuam Cash Crunch May Be Due in Part to Spending FY16 Money on FY15 Expenses

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Section 30 money for FY16 was used to pay tax refunds and other expenses for FY15.

Guam – Although revenue projections show that GovGuam is on track to collect the money it budgeted for this fiscal year, GovGuam is facing a cash crunch. This cash crunch may be due in part to GovGuam spending Section 30 money meant for this fiscal year on last fiscal year’s expenses.

 

https://www.youtube.com/watch?v=s9ypzVeIRew

 BBMR has said that GovGuam revenue projections are on track to collect slightly more money than they budgeted for this fiscal year. Meanwhile the hospital is struggling to pay vendors, some of it’s employees can’t even retire and education agencies are behind a combined total of $23.7 million dollars.

 A lot of this may be due to the fact that GovGuam was already short on cash at the end of the last fiscal year. In fact GovGuam had to pay out tax refunds and other debts using Section 30 money that was meant and budgeted for this fiscal year.

 Back on September 14 of last year with two weeks left in the fiscal year GDOE had its power cut off due to non-payment, GCC was behind $9 million dollars, and UOG was short $17 million. Back then Vice-Speaker B.J. Cruz told PNC. “I don’t believe they have the cash they’re waiting for Section 30 to bail them out,” said Vice-Speaker Cruz. The problem with this is that Section 30 money was meant for this fiscal year and was already budgeted for this fiscal year.

 “And so we’ll be short somewhere and last October was not the first time it was done. In 2014 just before the election when they received a windfall of almost $70 million dollars it was used to pay all the tax refunds that year to make sure everything was done before the election again to meet the court imposed deadline last year they did it,” said Vice-Speaker Cruz.

 The Vice-Speaker says it looks like they may have to do the same thing again at the end of this fiscal year. “Until and unless the administrations starts to religiously put into the trust fund the 28 percent that its supposed to we will always have to be playing catch up at the end of the fiscal year,” said Vice-Speaker Cruz.

 

 If this trend continues this means we will to start off each fiscal year with a built in deficit.