Office of Finance and Budget Director Steve Guerrero admitted during yesterday’s budget session that his office and the Bureau of Budget and Management’s revenue estimates for fiscal year 2021 were at best just “guesstimates.”
Guerrero was responding to a question from Sen. Sabina Perez who asked how OFB can assure the “robustness” of its budget estimates considering the Guam Visitors Bureau’s calculation that there is a 98 percent drop in tourist arrivals to Guam.
Perez also pointed out that GovGuam was kind of “insulated” right now because of the money coming in from the federal government. But what happens when that federal money dries up in January and GovGuam still has 10 months of fiscal year 2021 to fund without the benefit of high visitor arrival numbers?
“To answer your question truthfully, I can’t really think of how it would help if I don’t know exactly how much money we’re going to receive … the $18 million based on the 400,000 visitor arrivals projected by GVB is probably, I guess, the best ‘guesstimate’ that both the Bureau of Budget Management and OFB came up with,” Guerrero answered.
With regard to corporate taxes, Guerrero also has a grim prognosis, pointing out that of the 3000-some businesses on Guam, half of them are currently being adversely affected by the coronavirus.
“If unemployment will continue at the rate it’s going, it’s kind of difficult to figure out how much, if anything, corporate taxes will be affected next year. Remember, corporate taxes being collected this year is as a result of events that happened in 2019. What will happen in 2020 by the end of the fiscal year? At the rate we’re going, we all know there’s going to be reduction. But what the impact of that is … is again anybody’s guess,” Guerrero reiterated.
Later on during the budget session, Guerrero pointed out that what the island is experiencing now economically, is what’s going to be reported out in 2021.
“So you got to consider the effects of what’s not going to be around next year,” Guerrero said.
For instance, the federal Paycheck Protection Program helped employers keep their employees under payroll. But if that, and the other unemployment assistance are not extended, Guerrero said GovGuam will lose out because there will be less taxes to collect.