VIDEO: Bond Borrowing May Require Gov Guam to Max Out on Borrowing Capacity

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Guam – Gov Guam has a little more than a month to come up with a budget for fiscal year 2012, and the legislature and the administration have yet to work out differences in spending priorities and work out the details of the bond borrowing measure for tax refunds. the bond borrowing will require the legislature to raise the debt ceiling to 100% in essence maxing out Gov Guam’s credit.

 

 

Senator Ben Pangelinan is concerned with the Fiscal Year 2012 budget request that the governor’s office has submitted. Specifically he’s concerned about budget cuts for agencies like DOE, UOG, GCC the judiciary and the mayor’s council of Guam. DOE is of particular concern as the senator says the administration has proposed giving DOE $16 million dollars less than it is currently getting this year.

 “So that means there’s $16 million dollars less for teachers in the classrooms on the other side of the equation are the executive branch agencies there is over close to $12 million dollars for new employees that are not there today that will be hired in the fiscal year based upon their request to fill positions,” said Senator Pangelinan adding, “When you have this kind of difference in shortage in budget the only place it comes out is the taxpayers pockets because that means in order to make sure we don’t have a pay less payday at DOE because we set aside $16 million dollars less for them what has always happened is they’ve taken the money set aside for income tax refunds and we’ve funded that shortfall.”

 Paying out tax refunds is another major issue that the legislature will have to hammer out with the administration. The Governor wants to borrow money on the bond market to pay out all tax refunds by December. Gov Guam has almost reached it’s borrowing limit known as a debt ceiling. To borrow the amount the governor wants to borrow the legislature will have to raise the debt ceiling. The current debt ceiling is set at 90% of the value of all property on Guam. The governor wants the legislature to raise the debt ceiling to 100% of the value of all property on Guam.

 “The borrowing amount was I think $340 (million) when they submitted the budget and yesterday they said they want $380 (million) now,” explained Senator Pangelinan adding, “The governor is requesting that we raise the debt ceiling up to a 100% percent of our limit but based on the numbers that we’re facing we may have to increase it to 110% percent of our limit. So again we need those numbers to be quantified in order to be provided to members of the legislature to make their decisions.”

 Senator Pangelinan says this is why he and other lawmakers need to sit down with the Adminstration. In fact he says there was a meeting scheduled for today but the governor’s fiscal team didn’t make it.

 “I must stress that because of the short time frame that we have in this budget we have to increase cooperation and increase communication and the governor and his staff keep saying they’re working well there’s openness there’s transparency yet we had a meeting set up this morning we’ve confirmed yesterday that the meeting was set for today they confirmed their attendance we’re there to convene the meeting with the senators and then they don’t show up. I mean it’s time that we just kinda get past the rhetoric on some of this stuff and just do what we say we tell people we’re doing instead of telling people we’re cooperating let’s just cooperate because if we can judge it from this morning there’s no cooperation nobody showed up to a meeting they confirmed yesterday they were gonna come to,” said Pangelinan.

 Yesterday the governor told PNC that he is hoping that his tax mapping program will result in higher property values on Guam and thus a naturally higher debt ceiling. this will have to be done quickly however as Guam law requires that the budget must be passed by August 30th.