Guam – The Calvo administration has released the breakdown of Gov Guam’s cash shortfall. While their list details how they arrived at their projected shortfall budget chair Senator Pangelinan says not everything on the list is an actual liability and some of the items are already accounted for in this years budget.
This week Governor Calvo announced that Gov Guam was in a dire financial condition. His financial team announced that the government would go broke if they had to pay out all their liabilities at once. They arrived at a figure of $116 million if they had to pay off a bunch of unprogrammed liabilities but they never showed exactly how they arrived at their figure. Today they released a list detailing how they arrived at the figure but the list actually totals $126.8 million dollars. However, budget chairman Senator Ben Pangelinan says the list contains items that were either already budgeted for or aren’t even liabilities. Here is their breakdown of existing and potential liabilities that are not programmed.
The first on the list is the COLA judgement which totals $23.1 million dollars. Senator Pangelinan says he wouldn’t mind if the governor chose to pay out this entire amount of COLA interest but there is a way to pay it a little bit at a time. “If the governor’s saying he’s gonna pay this I’m supporting him on it in fact I have a bill on his desk now that will structure this payment so we don’t have to pay the entire thing in one year.” Next is the Guam Memorial Hospital and DOE’s retirement fund contributions listed at $11.3 million dollars. “There is a payment plan in place that we pay interest only on this and then when a employee wants to retire then we have to pay an employees contribution for that singular employee and then they retire but there is payment program in place we don’t have to pay the entire amount this fiscal year,” said Pangelinan.
Then there are the merit bonuses pegged at $1.5 million. Senator Pangelinan is not sure what this liability refers to. Next is law enforcement pegged at 6.3 million. Pangelinan is assuming this is in reference to the ten percent raise due to law enforcement personnel. “If he’s suspending the hay why’s he gonna pay the ten percent,” said Pangelinan. Then there’s the Calvo’s Selectcare health insurance plan for Gov Guam employees that will cost $13.8 million dollars. This is one of the unprogrammed and unforeseen liabilities that Pangelinan agrees was not budgeted for and will cause a shortfall. Next is they hay pay raises for unclassified employees pegged at $5.5 million. “So this is for the special assistants the directors their hay raises basically the Governor, the Lt. Governor’s gonna get a pay raise so I guess their gonna suspend the classified service pay raise and he’s gonna implement this to give himself a pay raise something’s not right here if he’s saying this is a liability because there is no law that authorizes this so this is not a liability because there is no statute that authorizes the paying for the unclassifieds,” said Pangelinan.
Then there is what’s called inter-fund borrowings totaling $9.6 million. Pangelinan explains this figure arrives from the money that’s owed to accounts that were drained through the governor’s transfer authority. These are flexible amounts that are basically up to the governor to manage not monies that definitely have to be re-imbursed within a particular fiscal year. Finally there is the largest liability on the list the making work pay tax credits pegged at $55.5 million dollars. This is actually a revenue not a liability. This is money that was given to Gov Guam by the federal government to pay the making work pay credits. “The funny thing is this is actual cash this is cash that we got from the federal government for the make work pay credit program,” said Pangelinan adding, “We hold that cash and we don’t book it as revenue until we process the income tax refunds and only a portion of that credit is now a liability of the Government of Guam.”
Senator Pangelinan still believes that if the governor follows the budget that was passed and enacted into law GovGuam should be okay. He also notes that while the administration’s breakdown includes a bunch of liabilities that are questionable it also excludes one that isn’t at question namely the nearly $12 million dollars required for mental health’s permanent injunction.