New legislation won’t save education agencies from $9M in cuts this fiscal year

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Guam – Educational agencies will now have to reduce their fiscal year 2019 budgets by $9 million with the veto of legislation that would have levied additional property taxes.

The Guam Department of Education will taken on the brunt of those cuts.

Intentions may be good, but sometimes it isn’t enough. That’s the case for one provision in the Fiscal Year 2019 budget law that was intended to levy a tax on real property valued at $1 million or more—except the budget passed sans those two key words “or more.” Efforts to correct this typo—from seeking a legal opinion to emergency legislation—have failed and now our educational agencies will have to pay the price.

Public Auditor BJ Cruz, who was speaker and budget chair when the budget law passed, says Attorney General Elizabeth Barrett-Anderson’s reading of the law is absurd. The retiring AG opined that the words “or more” must be included.

“The attorney general should have recognized that the U.S. Supreme Court … recognized the rule of absurdity,” laments Cruz. “And everyone knew that the law could and should have been read ‘a million and more’, not just a million, otherwise you would have an absurdity of your property being a million dollars and mine being a million and one dollar–you get the tax increases, I don’t because of the absurd reading.”

Moreover, Governor Calvo, apparently, reneged on a deal they had.

“We thought he was gonna sign it that’s why they passed it and in true Trumpian fashion, the deal that we thought was made was reneged on and he vetoed it,” says Cruz.

With Governor Calvo’s veto of bill 374, which would have added the words “or more” to the language of the law, property taxes being deposited into the Territorial Educational Facilities Fund will be projected at $29.2 million, instead of the $38.3 million the words “or more” would have provided.

BBMR Acting Director Lester Carlson sent notices to six GovGuam agencies that benefit from the TEF fund, to advise them of the required cuts to their budgets.

The “required” reduction in TEFF revenues include:

  • Mayor’s Council by $281,000
  • Department of Chamorro Affairs by $622,000
  • University of Guam by $565,000
  • the Guam Commision for Educator Certification by $91,000
  • Department of Public Works by $2.5 million
  • Guam Department of Education by $4.8 million

“I mean it’s a big hit to education no doubt about it and nobody wants to do that but we also need to make sure that we isolate the issue while we look at solutions,” Carlson said on News Talk K57’s Mornings with Patti.

In fact, Carlson said Sen. Joe San Agustin, who’s poised to be the next chairperson of appropriations, has indicated that he plans to reintroduce the bill to amend the law.

“I did also get a call from Joe San Agustin telling me that he will introduce a bill as soon as they’re seated to address this problem. In lieu of that, I couldn’t just sit back, it wouldn’t be prudent for us to say, ‘Oh OK Joe’s gonna take care of it.’ That’s not the right thing to do,” notes Carlson.

But that kind of solution, not matter how hastily it’s accomplished in the 35th, won’t come fast enough. Cruz, says a new bill wouldn’t apply until next fiscal year because tax assessments have already been made with the first payment deadline set for February 15.

“In this budget, there is no way of being able to save it. That’s why my original letter to the governor two months ago was please tell Rev and Tax to hold off. The bills for your property taxes should be going out within the next couple of days,” says Cruz.

GDOE Superintendent Jon Fernandez issued a statement, saying, “We are disappointed by the directive to further cut funding from the Guam Department of Education. We are already operating with over $15 million in cuts from last year’s budget. It’s my hope that the incoming administration and the Legislature will work hand in hand to address this issue as soon as they can. Otherwise, we will need to make further and deeper cuts in the middle of this school year.”