By Mar-Vic Cagurangan
Variety News Staff

SENATOR Rory Respicio, D-Agana Heights, is seeking the creation of a bipartisan committee that would take an “objective” and “honest” look into the government of Guam’s outstanding debts “in a nonpartisan manner.”
Respicio is proposing that the subcommittee, composed of five Republicans and five Democrats, be formed under the committee on revenue, finance, commerce and economic development chaired by Vice Speaker Eddie Calvo, R-Maite.
Along with the proposal to create a debt panel under Calvo’s committee, Respicio also introduced a companion bill to create a legislative office that would assess GovGuam’s overall financial situation.
Bill 37 proposes the establishment of the Office of Finance and Budget within the Legislature that would adopt an econometric model for Guam’s existing and projected economy. Such a model would be used to “simulate the effect of revenue forecasting” and the coordination and gathering of information to be used by the legislature in adopting revenue projections and fiscal policy.
Democrats criticize the Camacho administration for allegedly making bloated revenue projections that are impossible to achieve, thus resulting in deficit growth.
“I understand why the Camacho administration may feel that it is in their best interest to avoid any substantive discussion on finances,” Respicio stated in a letter to Calvo.
“However, I do not understand why this critical topic does not appear to be a priority of your committee on finance, taxation commerce and economic development,” Respicio told Calvo.
The Agana Heights senator also slammed Calvo for allegedly ignoring the financial crisis issue as far back as the 28th Legislature, when the question about the administration’s overstated revenue projection was first raised by then Sen. Benjamin Cruz.
Toward the last few weeks of the 28th Legislature, Cruz introduced Bill 377, which sought readjustments to the $437 million budget for fiscal year 2007 to reflect an actually achievable revenue level.
Sen. Judith Guthertz, D-Mangilao, has revived the proposal in the 29th Legislature, where it is docketed as Bill 16.
Guthertz’s bill, Respicio said, could have been included on the agenda when Calvo conducted a public hearing on Bill 15 and Bill 23 two weeks ago. Instead, Calvo’s committee “completely bypassed” Bill 16, Respicio added.
Introduced by Calvo, Bill 15 requires the administration to draft a fiscal recovery plan. Bill 23, proposed by the administration, seeks to authorize a $123.8 million loan agreement between GovGuam and the Bank of Guam for payment of the cost of living allowances owed to 4,000 retirees.
“The public hearing would have been the perfect venue to discuss the proposed legislation and our debt with members of the administration,” Respicio said. “Sadly, this did not happen.”
“The government’s financial hemorrhaging and rapidly ballooning deficit and its impact on the government’s overall obligation is one of the most important subjects that must be addressed by the legislature,” Respicio wrote.
He said GovGuam’s deficit has increased by 144 percent over the past four years, from $209 million in 2002 to $511 million at the close of 2006.
Respicio noted that during the recent public hearing, administration officials admitted that GovGuam’s overall debt hovers around $769 million.
“The increasing deficit and its impact on the growing obligations of this government are of direct consequence of the present cash shortfall reaching crisis proportions,” Respicio said. “This state of crisis has resulted from years of overstatement of revenues, expenditures exceeding the estimates and the lack of cost-cutting efforts and revenue enhancement initiatives to mitigate a deteriorating situation.”