“There is No Such Thing As a Paper Deficit” – Vice-Speaker B.J. Cruz

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Vice-Speaker Cruz to Hold Oversight Hearing on Friday

Guam – The Governor’s office announced yesterday(Tues) that GovGuam had a $65.3 million dollar deficit for fiscal year 2014. However, the administration is referring to it as only a “paper deficit” that is mostly due to the timing of the expenditure’s recording. Meanwhile legislative budget Chairman Vice-Speaker B.J. Cruz says he’s never heard of a paper deficit.

 

 “There’s no such thing as a paper deficit. If you spent more than the revenue that you anticipated then it is a deficit,” said Vice-Speaker Cruz, adding “I’m not exactly sure what they mean by paper deficit. There is no arguing the fact that during fiscal year 14 the administration spent more than the revenue that we projected.”

 According to the administration the paper deficit is a result of paying for bills and debts that were unbudgeted. The Governor’s office says that this means there will be a $65.3 million dollar deficit at least on paper. This despite the fact that they collected more revenue than expected for last fiscal year and despite underspending in other areas. Here is the breakdown of the unbudgeted bills paid that the administration says led to this paper deficit.

 

Unbudgeted Shortfalls/Timing Differences Amount

DOE Operational/ARRA: $26m

Law Enforcement Pay: $12.9

Solid Waste: $10m

Capitalized Interest For Bonds: $8.6m

GMH: $7.8m

 

 So what does all of this mean? Will it affect this current fiscal year? “Well that’s why I’m having the oversight on Friday. I’m going to try to find out is there mana from heaven that’s gonna be falling sometime between now and September?” said Vice-Speaker Cruz adding, “hopefully we’ll get some of the answers this Friday at the oversight and we’ll get some more answers when the final audit is finally released next month.”

 

 Meanwhile Adelup assures us that they are tracking a surplus in revenues for the current fiscal year and they also assure us that tax refunds will continue to be paid on time.