By Gerardo R. Partido
Variety News Staff

THE administration yesterday warned that if the fiscal year 2007 budget is not amended, thousands of government of Guam workers may be furloughed by April this year.
In its fiscal recovery strategy plan submitted to the Legislature yesterday, the administration said it is facing a $62 million real cash shortfall because actual revenues are only tracking at $434 million, far below the original $496 million estimate.
Without an amended budget and in order to live within the current FY 2007 budget provisions, the administration said expenditures must be reduced by $49 million, through the furlough of 2,222 employees no later than April 1.
Gov. Felix P. Camacho is not sparing himself from the drastic cost-cutting measures as he issued a directive cutting his salary, and the salaries of the lieutenant governor, those of their staffs, and all cabinet members by up to 20 percent.
Camacho has also ordered all the remaining unclassified employees in the line agencies under general funding to receive a 10 percent cut in pay.
The pay cuts are effective immediately and are expected to realize $1 million in savings.
Earlier, Sen. Rory Respicio, D-Agana Heights, filed Bill 63, which would include elected officials in the list of GovGuam employees eligible for a pay cut.
According to the administration, the decrease in expenditures must likewise be accompanied by additional revenues to minimize the impact on GovGuam operations and personnel.
The governor is proposing an immediate increase in fees to meet the cost of GovGuam service via legislative action, as opposed to a lengthy adjudication process.
Moreover, Camacho wants the immediate restoration of GovGuam’s full tax base by removing exemptions and credits.
Under the fiscal recovery plan, GovGuam may also be forced to borrow because working capital financing must be acquired to make up for the shortfall as the administration plans for longer term reductions in expenditures.
According to the administration, a minimum cash infusion of $34 million is needed immediately to meet ongoing operations and payroll requirements.
Plans for a line of credit will be finalized this month for April implementation.
According to Bernadette S. Meno, the governor’s director of communications, a revised FY 2007 budget will be submitted by the administration by Monday, March 19.
The governor is requesting the Legislature to address the budget immediately for an April 1 implementation.
Vice Speaker Eddie Calvo, R-Maite, who heads the finance committee, agreed to look into the drafting of a new budget and has asked the administration to submit it in bill form.
Sen. Ben Pangelinan, D-Barrigada, has introduced Bill 66, which seeks to reduce the fiscal year 2007 budget by $25 million.
Pangelinan agrees with the governor that the FY 2007 budget is inflated. He said the $25 million was added to the budget that the governor submitted for FY 2007 last year.
The current budget law authorizes the governor a continuing appropriation to expend the balance of prior years’ appropriation for the executive branch departments and agencies for operations in FY 2007.
“With this reduction, the budget will be in line with the governor’s submittal. I offer this bill as one solution in balancing the FY 2007 budget,” Pangelinan said.