By Mar-Vic Cagurangan
Variety News Staff

FINALLY admitting that the government of Guam is “facing a financial crisis that can no longer be ignored,” Gov. Felix P. Camacho yesterday gave an outline of his administration’s fiscal recovery and deficit reduction plans as he urged the Legislature to expand his funding allotment control.
In his State of the Island Address delivered before the 29th Legislature, the governor specifically asked the senators to restore his fiscal authority over the Guam Public School System, whose budget is under the full control of the Guam Education Policy Board.
“GPSS must focus on the business of teaching our children and return the accounting and cash management aspects to the Department of Administration,” the governor stated in his address, the fifth since 2003 when he first took office.
Senators, however, said they were not inclined to grant the governor’s request, saying he already has adequate power and authority to manage the government’s finances. (See related story)
The governor’s address was straightforward and relatively short compared to his previous speeches. It painted a bleak portrait that contrasted with his optimism in his inaugural speech when he was sworn into office for his second term last month.
Along with the request for funding control, the governor unveiled an outline of his administration’s cost-containment and revenue enhancement measures.
Camacho said he will sign in the next couple of days an executive order detailing his fiscal reform program, which includes a hiring freeze, government travel restrictions, a 50 percent reduction in overtime pay, bond borrowing, and the creation of the Economic Recovery Task Force.
The governor acknowledged that despite the promise of positive economic opportunities offered by growing tourism and the military buildup, the “financial state of the government of Guam is bleak,” with a deficit likely to balloon to $700 million in the next five years.
He attributed the government’s fiscal crisis partly to what he considers inadequate fiscal power.
“The areas under my direct control have held the line on spending but it is extremely difficult to manage the general fund when I control less than 50 percent of the funds,” the governor said.
He singled out GPSS, which has been vested with full power to manage 83 percent of the government’s monthly income in tax collections appropriated to the agency.
GPSS, which gets a lion’s share of the budget every year, always finds itself in a fiscal quagmire resulting in payless paydays, failed retirement remittances, and an inability to meet the requirements of the Every Child is Entitled to Adequate Education Act.
In the 2007 budget act, the Legislature appropriated almost 50 percent of the government’s $457 million budget to GPSS. Education officials, however, claim that cash allotments don’t find their way to GPSS.
“We all know the problems facing the Guam Public School System and how those problems have had a ripple effect throughout the entire government,” Camacho said.
He said the 28th Legislature’s decision to give GPSS full funding before processing the budgets for other agencies has caused shortfalls throughout other branches of the government of Guam.
“It is obvious that the lack of controls and oversight has led to some questionable expenditures and a seeming disregard for the cash realities that the entire government faces. Decisions by the school system clearly emphasize the need for greater accountability in the way funds are spent and allocated,” the governor said.
“The administration needs the authority to work side by side with the school system to analyze their true needs and help them prioritize spending to ensure that the funds we give them make it into the classrooms and get to the vendors,” he added.
The governor called on the senators “to lift local restrictions on my Organic authority to supervise the entire executive branch.”
“Allow me to navigate our resources through these fiscal challenging times. And work with my administration to increase revenues so we can bridge the gap as we begin to implement fiscal recovery and deficit elimination plans,” Camacho said.