No plans to cut GovGuam spending, despite falling revenues

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The ongoing coronavirus pandemic has caused GovGuam revenues to fall $8.1 million short of projections.
May CRER

As the coronavirus lockdown approaches its sixth month, island hotels, restaurants, and small businesses that cater to tourists are struggling to stay afloat and tax revenues are falling.

Yet Governor Lou Leon Guerrero Monday said she has no plans to impose any austerity measures on GovGuam or reduce GovGuam spending. Instead she urged diversification of the economy and more reliance on alternative energy.

The ongoing coronavirus pandemic has caused GovGuam revenues to fall $8.1 million short of projections according to the May Consolidated Revenue and Expenditure report, the most recent budget report that is posted on the Legislature’s website.

Federal CARES Act aid has, so far, cushioned GovGuam against the fall.

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But that money will only go so far and with tourists now not expected to begin to trickle back in until next January, the downward pressure on the GovGuam budget will only increase.

However, when asked directly whether she was planning any GovGuam austerity measures Gov. Lou Leon Guerrero yesterday said this: “In terms of austerity, I have always said that our government has been the most frugal administration since the last eight years. Our budget is not over-inflated our budget is very real, its very realistic.”

Instead of cutting back on GovGuam expenses most of which are personnel and benefits costs, the governor suggested diversification and innovation.

“We are still pursuing other diverse economies, of course working very closely with telecommunications is one. Austerity programs? Anywhere from improving our technology so we can be more efficient and effective … austerity programs might be also to look at alternative energies that we might be using to help run the operations of our government,” the governor said.

In particular, the governor said she is looking forward to military spending to help make up for the lockdown of the tourist industry.

” I look forward to maybe having more military spending here. As we are seeing now, for the military (Guam) is a very safe place to come and relax and have recreations here. There are many fleets that are out there in the waters that are planning to come here and use Guam as their recreational port. And that is an industry that I think will help us with our economy.”

During the ongoing pandemic, the governor has acknowledged that no GovGuam employees lost any reduction in their income or benefits. Many have received hazardous pay and efforts continue to provide double-pay for many others.

In addition, the Legislature just approved, and the governor signed into law, a bill that provides GovGuam employees a choice of health insurance providers. The public hearing on the measure was waived, there was no fiscal note, and even the governor acknowledged that the cost to government may increase.

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