Speaker Cruz proposes two-year or biennial budget for FY18 & FY19


Guam – Speaker B.J. Cruz is proposing a two year or biennial budget for fiscal years 2018 and 2019. According to a release from the Speaker’s office this biennial budget is a more conservative spending plan than the Governor’s proposed GY18 budget.

The Speaker writes that this biennial budget will remove gubernatorial politics from the FY2019 budget process and refocus government efforts on achievement rather than budget battles.

The speaker writes that “decades old problems cannot be solved in a single fiscal year.” He also asserts that this biennial budget will reduce GovGuam spending in FY18 while limiting growth in FY19.

The biennial budget proposes spending $688.5 million for FY18 which is $33.8 million less than Governor Calvo’s proposed FY18 budget.  The Speaker is also proposing a $704 million dollar budget for FY19 which is $18.3 million dollars less than the Governor’s FY18 proposal.

According to the Speaker the budget will still ensure that all line agencies can cover current personnel and operations. In addition, $1.05 million will go to early childhood education, money will be appropriated for the recruitment of 15 revenue agents at the Department of Revenue & Taxation, Over $4 million from the Highway Fund will go to roads, Territorial Educational Facilities Funds will support bus operations and money will go to fund electronic monitoring for pre-trial detainees.

The Speaker’s budget also caps the cost of the GovGuam health insurance contract for FY18 and FY19 something the Speaker writes will “ensure the legislature is prepared to adequately fund GovGuam retirees.”

This is not the first time a biennial budget has been proposed. In fact, Governor Eddie Calvo proposed a biennial budget for FY2012 and FY2013.


READ Proposed SBill 22-34 (COR)



Cruz Offers Biennial Fiscal Plan 
(July 27, 2017 – Hagåtña) Making good on his continued commitment to taxpayers, Speaker Benjamin J.F. Cruz has released his proposed substitute budget bill this morning, revealing a conservative biennial spending plan for Fiscal Years (FY) 2018 and 2019. The appropriations chair’s financial roadmap reduces proposed General Fund expenses by $34 million when compared to the Fiscal Year 2018 Executive Budget Request, removes gubernatorial politics from the Fiscal Year 2019 budget process, and refocuses government efforts on achievement rather than budget planning.
What Is a Biennial Budget?
A biennial budget is a budget that makes annual appropriations for two fiscal years in a single legislative session (calendar year). According to data from the National Conference of State Legislatures, nineteen states—including Hawaii, Washington, and Nevada—adopt biennial budgets. SB 22-34 (COR), Cruz’s proposed substitute measure of the budget bill sent down by the Governor, would implement a biennial fiscal plan for Fiscal Years (FY) 2018 and 2019 only.
Why Implement the Biennial Method?
This isn’t the first time a biennial budget has been recommended for the government of Guam (GovGuam). In 2011, Governor Eddie B. Calvo submitted a two-year budget proposal for FY 2012 and 2013 on the premise that a biennial would “afford this government the opportunity to plan.”
Though studies have indicated that no fundamental policy difference exists between the traditional budget process and biennial budgeting, Cruz agrees with Calvo that budget planning must be based on a longer-term view of the government’s fiscal realities. Put simply, decades-old problems cannot be solved in a single fiscal year.
In addition to recognizing Governor Calvo’s foresight, the appropriation chair’s decision to implement a biennial budget was ultimately based on the desire to accomplish the three following goals:
  1. Reduce proposed General Fund expenses by at least $34 million in FY 2018, and further limit budget growth in FY 2019
  2. Remove gubernatorial politics from the FY 2019 budget process
  3. Refocus government efforts on achievement rather than budget battles
Cruz’s biennial budget also acknowledges that projecting future revenues is never an exact science. For this reason, both FY 2018 and FY 2019 Revenues “Available for Appropriation” remain lower than the Governor’s single year General Fund (GF) projections in his FY 2018 Executive Budget Request:
  • FY 2018 “GF Available to Appropriate” Projection: 
$688,559,103 or $33,878,286 less than Governor’s FY 2018 EBR projection
  • FY 2019 “GF Available to Appropriate” Projection:
$ 704,083,026 or $18,354,364 less than Governor’s FY 2018 EBR projection
Lastly, after years of the GovGuam Health Insurance Contract costing taxpayers millions more than its alternative—a decision that ultimately jeopardized Retirees’ Medical, Dental, and Life insurance coverage last summer—Cruz determined it necessary to cap the cost of the GovGuam Health Insurance contract for Fiscal Years 2018 and 2019, ensuring the Legislature is prepared to adequately fund GovGuam retirees.
What Does This Mean for Government Agencies?
SB 22-34 ensures that all agencies can cover current personnel and operations. The measure also invests new dollars in education, public safety, and road repair—all while removing the uncertainty of a contentious budget process in 2019:
  • Appropriates $1.05 million to expand Early Childhood Education
  • Recruits 15 revenue agents to increase revenue collections and pursue fraud/non-filing cases and 15 additional personnel at the Department of Motor Vehicles to cut down waiting time
  • Provides the Guam Highway Fund over $4 million for road resurfacing and repairs
  • Supports bus operations through the Territorial Educational Facilities Fund
  • Funds electronic monitoring to decrease the detainee population and reduce costs at the Department of Corrections
This biennial plan does not preclude the adoption of future amendments, the execution of a supplemental budget when appropriate, or the need of the Legislature to actively monitor GovGuam’s revenue and expenses. Additionally, SB 22-34 maintains the flexibility afforded by a lump sum budget. This flexibility, coupled with the Governor’s 15% transfer authority and the ability of agencies to know the FY19 Budget landscape beforehand, should positively impact government operations at all levels.
Will Agencies Have a Say on the Matter?
In accordance with the 34th Guam Legislature’s Standing Rule on substituted measures (Section 6.04 (c) (3)), the Committee on Appropriations will hold a Public Hearing for SB 22-34. The hearing will take place next Thursday, August 3, 2017 at 2:00PM in the Guam Congress Building. As always, Cruz welcomes any and all testimony.
Where Can I Find SB 22-34?
Both SB 22-34, and a copy of the Committee Report narrative, are available for public browsing on www.ofbguam.org. Utilizing user-friendly and interactive dashboards, the OFB website features comparative data and information on FYs 2015, 2016, and 2017 as well as the proposed FYs 2018 and 2019 appropriation and funding levels for each government department and agency.