VIDEO: Fiscal Team Makes Refund Bond Case at “Special Presentation”


Guam – A visibly angry Governor Eddie Calvo made an unexpected appearance Wednesday night at an extra-ordinary “special presentation” before Guam lawmakers on his proposed tax refund bond.

The Governor’s appearance was as surprising as the unusual “presentation” itself.  It was not scheduled until late Wednesday afternoon. It was not held in session, or as a round-table or in the Committee of the Whole. It couldn’t be called a hearing, because that would have violated public notice laws, so it was dubbed a “special presentation.”

A presentation of any sort is what the Governor has been calling for since the current session began last week Tuesday with the announcement by Budget Committee Chair Senator Ben Pangelinan that the Governor’s $343 million refund bond would not be considered. Two days later, Senator Pangelinan introduced his own alternative $180 million refund bond.

Last night’s “special presentation” got underway about 6:30 pm in the legislative hearing hall.Rev & Tax Director John Camacho, DOA Administrator Benita Manglona, BBMR Director  John Rios and, GEDA Administrator Karl Pangelinan who took the lead, running  through the numbers on the Governor’s bond proposal.

* $311 of the bond would be used to pay off  all tax refunds owed

* the rate on the bond is projected to be 5.5%, and the time to float it is now because rates are at record lows

*  full debt service doesn’t begin until 2016

*  bond to be paid back using 3% to 4%  from the gross receipts tax

*  $14.3 million in interest is already accumulating annually on the millions in refunds owed and it would be cheaper to float the bond

But Senators Rory Respicio, B.J. Cruz and Pangelinan all pressed the GEDA Administrator hard on that last point, accusing him of counting as revenue that $14.3 million in interest because that interest has not actually been paid, yet.

The fiscal team responded that the interest would no longer have to be paid if  the debt owed were converted into a bond, at a fixed and lower rate, and in that sense it would be a savings.

But Vice Speaker Cruz returned to a point he made earlier this week, reminding the gathering that 40%  of  GovGuam’s  $680 million budget is dependent on federal largess. The Senator emphasized the potential impact the current budget crisis in Washington could have on Guam’s federal funding.

A bipartisan Congressional Super Committee of 12 must reach agreement on $1.5 trillion in spending cuts by December 23rd or else $1.2 trillion in across-the-board cuts will automatically kick in loping off equal amounts from defense and non-defense spending.

“I just really think this discussion is premature,” said Cruz, ” because we don’t know how much we’re going to lose.”

Then, about 7:30 pm, the Governor, suddenly appeared.

He was clearly angry when he entered the hearing room and asked to speak. He began by scolding some lawmakers for interrupting his fiscal team, singling out Senators Respicio, Cruz and Panglinan.

“I want the public to know why we are short on revenues,” said the Governor, “because the revenue projections were bloated.”

“It didn’t happen in just this budget Governor,” responded Senator Pangelinan.

“We have a bond proposal that will pay off prior year tax refund obligations,”  said Calvo, turning to Pangelian,  “If  you have a plan lets see it … but the current plan that is on the table does not do it.”

The Governor then said he would leave the “presentation.”  But Rules Committee Chair Respicio urged him to stay.

“Wait a minute Governor I don’t think you should leave.”

“Senator Respicio … can I tell you something? I’m offended,  this is not even a hearing,” said the Governor, “I have a problem that this is not a formal event.”

“You asked for a presentation,” said Respicio “and your getting that Governor  … procedurally there is no $344 million dollar bond proposal before the Committee of the Whole … so it is procedurally correct that we have this presentation outside the committee of the whole.”

Later the two got into this testy exchange:

Respicio: “I  just want to congratulate you for telling a good story … you want to fund $11.7 million dollars of new positions …  the other thing you don’t want to talk about is just how many positions have you put at the port Authority?”

Governor: “Senator are you here to make accusations? Because I refute everyone of them … I’ve never taken a personal shot at you, but Senator Respicio you have taken quite a few shots.” 

Respicio: “You just can’t say one thing and keep doing another.”

Governor: “Let me ask you. When I do make my cuts, which I will be doing, will you endorse those cuts? Since you are now questioning whether I’ve made those cuts.”

Respicio: “I’m not questioning the cuts you make. But I’m asking you to be truthful.”

Governor: “Can you please answer my question.?”

Respcio: “We’ll that’s certainly your prerogative is it not?”

Governor: “Will you endorse the cuts on personnel to keep this Government viable?”

Respicio: “Well maybe things can be done differently.”

Governor: “I see. You have not answered the question.”

Respicio: “Neither have you. Neither have you sir.”

Speaker Won Pat to Governor: “You seem to have forgotten when your up here, it is the Senators who ask the questions.”

Senators then took turns asking the Governor questions and raising doubts about the Governor’s refund bond.

“I’ll be very frank with you Governor,” said Senator Pangelinan, I just see a plan to pay everything back … I don’t see the revenue structure, the revenue stream to be current going forward.”

Senator Tom Ada also expressed his skepticism. “I’m just conveying the difficulty I’m having in accepting these revenue projections based on the military buildup.”

And Senator Guthertz asked “Will this bond have any impact on not laying off employees?”

The Governor made no promises, saying his administration would try and minimize the impact of layoffs as much as possible.

“I want to work with you folks,” said the Governor. “There aren’t any easy decisions. I am hear to fight for my proposal … to plead for it.”

The “special presentation” finally wrapped up at 9:30 Wednesday evening.