By Mar-Vic Cagurangan
Variety News Staff

WHILE defending the government of Guam’s financial condition, a top administration official expressed confidence that the government will win the bond-borrowing appeal scheduled to be heard Monday at the U.S. Supreme Court.
George Bamba, the governor’s chief of staff, said the administration is relying on the bond-borrowing plan to settle all of GovGuam’s outstanding obligations estimated at $401 million as of last year.
But if the bond-borrowing plan falls through, depending on the U.S. tribunal’s decision, Bamba said the administration has put in place some austerity measures to allow the government to save up.
Bamba is accompanying Gov. Felix P. Camacho to Washington, D.C., where the bond-borrowing case will be heard.
The bond-borrowing plan, which is the subject of the litigation initiated by former Attorney General Douglas Moylan, was authorized by a public law enacted by the 27th Legislature when the Camacho administration first took office four years ago.
Last year, the administration came up with a new bond-borrowing proposal for $300 million to consolidate all government debts, including unpaid tax refunds, un-remitted retirement dues for employees of the hospital and the Guam Public School System, the $90 million earned income tax credit settlement, and unpaid bills.
The new bond-borrowing bill that the administration transmitted to the 28th Legislature was totally overhauled and reduced to a simple authorization measure allowing the payment of the cost of living allowances owed to 4,000 retirees.
With the new bond proposal pushed to the backburner, the administration is banking on the existing bond-borrowing law and hoping for victory in the Supreme Court.
As for GovGuam’s financial status, Bamba denied the Democrats’ claim that GovGuam is facing a $418 million deficit.
“The Democrats’ mathematical formula is based on a political formula. I thought the election was over,” Bamba said in an interview Thursday last week.
Responding to former Sen. Benjamin Cruz’s calculation of the government’s fiscal condition, Bamba said the $418 million that the former senator identified as a deficit includes the unpaid $123 million COLA and $90 million EITC settlements.
These two items, Bamba said, would only add up to operational deficit if they were charged against the government’s operational account for the current fiscal year.
“Borrowing makes sense in this situation. When you do a long-term borrowing against your current liability, then the only things charged against your current operation would result in a much smaller deficit,” Bamba said.
By consolidating debts, the liability amount is much reduced, he explained.
Budget director Carlos Bordallo, for his part, reported that GovGuam actually posted savings last year. “From fiscal year 2005 to 2006, our expenditures dropped by $12 million,” he said in an interview.
Alongside the spending cut, Bordallo said the government has given $5 million more to GPSS, $5.6 million to the Medically Indigent Program, and $3.4 million to public safety agencies.
“We’re directing our resources wisely and we’re having a deficit for the right reasons. Government resources are going to the governor’s priority areas,” Bordallo said.