Guam – Governor Eddie Calvo slammed the Democratic leadership during a meeting he called Tuesday at Adelup. He was responding to calls made by Vice Speaker BJ Cruz for the governor to take back his omnibus spending cuts bill and rewrite it. But governor Calvo vehemently rejected that proposal and instead denounced him for voting on bills that led to the financial problems the government is facing today.
“I’ll state for the record, we’re not going to introduce any new bill,” said Calvo. “But for the Senator Cruz who voted for what I consider an obscene amended budget for 2010–for him to say to say to come back with another bill, I’m not going to go along with his political theatrics.”
The governor is talking about the 2010 budget which was amended toward the end of that budget’s fiscal year that reflected only a $30 million deficit. The governor deplored some Democrat lawmakers over that last minute action as an audit later showed that the deficit was actually $70 million.
“When you talk about face saving where you, at the end of the year, change the budget to raise income tax reserve by over 30 million dollars thereby reducing revenues, isn’t that an empty promise? How can you, as an elected official, do something like that? That was probably one of the most unethical acts I’ve ever seen in my time as public servant,” deplored Gov. Calvo.
In response to the governor, Budget Committee Chairman Sen. Ben Pangelinan wrote via email to PNC: “The amendment made to the FY2010 provisions for refunds was based on discussions with the Government of Guam Auditors (Deloitte & Touche) and the Department of Administration. During the formation of the FY2010 revenue projections, the special accounting service and special economic service decided to include the ARRA Make Work Pay advance reimbursement as revenues. After the budget was passed into law, the Government’s Auditors pointed out to DOA that including the ARRA Make Work Pay Credit Advance Payment as revenue was a one sided accounting entry and required an offsetting expenditure to income tax refunds. Based on the feedback of the Auditors and DOA, the FY2010 budget was amended to increase the provision for tax refunds. In other words, the change was made to ensure proper accounting.”
“Any other interpretation of the actions of the legislature shows a lack of knowledge of government accounting principles, is wrong and really nothing more than a lack of understanding of what occurred and a deliberate twisting the facts for political purposes,” adds Pangelinan.
Asked about Sen. Cruz’s call for addressing the government’s shortfall by beefing up Department of Revenue and Taxation collections, Gov. Calvo said it would not be enough to offset prior year tax refunds plus payables.
“I think that’s a viable option but it’s part of the pie and it’s a rather, I would say, small slice of the pie,” says Calvo.
The bigger problem lies in the urgent need for up to $71 million in cuts, the Governor said. Asked what would happen if the Legislature doesn’t approve those cuts, Gov. Calvo said he may have to invoke his Organic Authority to make the cuts himself.
“From the very beginning when we came in, we knew where this government was at and how we got here. We understood too that probably the simplest way is reduction in workforce,” says Calvo. “We’ve also heard some of the sentiments from the public and the Legislature … I’m not too sure but we also heard that furloughs and layoffs were the last option. But if they are going to cry and debate us on issues such as benefits, such as overtime on things that will not at least cut the livelihood out for a fireman or policeman or a nurse or a teacher, what other options are they left?”