By Gina Tabonares
Variety News Staff

SENATOR Rory J. Respicio, D-Agana Heights, blames the dreadful state of the Government of Guam’s finances on politics.
Variety: Let’s talk about the Government of Guam’s financial crisis.
Respicio: “This problem didn’t happen overnight. It’s like the Titanic. It took hours for that huge ship to sink. In our case, those in charge, namely the Republicans, kept on sailing as if nothing was wrong. Now that this financial fiasco has spun out of control, our elected leaders are finally admitting it.
A problem of this magnitude doesn’t just appear. Large organizations like GovGuam, with nearly half a billion in annual revenues and more than 50 years of existence, don’t melt down five months into a fiscal year.
Six months ago, our people were made to believe that everything was fine. In fact, when Sen. B.J. Cruz warned that this would happen almost two years ago, he was told by the Camacho administration that his abacus was off, and even Vice Speaker Eddie Baza Calvo kept saying we are tracking ‘on target’ when, in fact, GovGuam’s expenditures outpaced its revenue collections by more than $100 million.
So far, this is the Camacho administration and Vice Speaker Calvo’s legacy to the people of Guam. I did not vote on the past two budgets prepared by Vice Speaker Calvo’s Office of Finance and Budget because their numbers did not make sense.”
Variety: Why was there a delay in revealing the crisis?
Respicio: “The answer is simple. They chose politics over principles. There have been no major disasters or political upheavals in Asia to drastically affect our island’s economy in the past two years. I am convinced that the Camacho administration and the leadership at the Legislature saw this crisis coming, and covered it up to get past the 2006 election season.
There was time to prepare but they did nothing. I believe the only logical answer for the delay is that they purposely ignored the crisis until after last November so that it would not affect the election.”
Variety: It seemed like you were talking about the financial problems for a long time and Senator B.J. Cruz was saying this, too, but there was never a big outcry from anywhere else.
Respicio: “I feel that some of our island media outlets didn’t really look into the story. Since the fiscal year 2007 State of Our Island Address, they haven’t kept the pressure on Governor Camacho, Speaker Forbes and Finance Chair Calvo to explain why they hid our problems for so long.
Senator B.J. Cruz began talking about GovGuam’s rising deficit and a $1 billion debt almost two years ago. They told B.J. that his numbers were way off. The governor’s chief of staff said there was something wrong with B.J.’s abacus. But when B.J. showed me his analysis, it made more sense than the numbers adopted by the Republican-controlled Legislature.
I was hoping that the other media outlets would’ve paid more attention to our island’s very serious problem. To their credit, K-57, KUAM and especially the Variety, covered the issue.
The other newspaper blasted me editorially for claiming that the debt surpassed the $1 billion mark. Now we know that our numbers are right. They wrote that I was a part of our government’s problem, but failed to point out that I voted ‘no’ on these budgets. Here’s what I’ve done as a minority senator to address the financial problem:
• Together with Sen. B.J. Cruz, I fought the inflated revenue estimates on the floor of the Legislature and tried to have them changed. The majority wouldn’t change them.
• I sponsored amendments to track finances more accurately and have the Legislature do its own projections. (For the past two years, Vice Speaker Calvo has not come up with his own revenue estimates, and still no one is pointing out that he has been derelict in his duty as chairman of Finance and Taxation). The majority voted them down.
• I voted ‘no’ on past budget bills (along with most of my Democratic colleagues, including B.J., Judi Won Pat, and for FY 2006, Lou Leon Guerrero) that had inflated revenue projections. The majority passed them. It seems to me that the real problem isn’t with the minority.
• I sponsored bills that would address some of our problems: Bill 37, to have the Legislature’s Office of Finance and Budget perform its own revenue projections; and Bill 42, to require that those testifying on financial matters be sworn in. The majority has not scheduled a public hearing on either bill.
• I co-sponsored Bill 16 with Senator Guthertz, to recall the FY 2007 budget and revise it based on actual cash collections. The majority has not scheduled a public hearing on this bill.
• I asked Finance Chairman Calvo to create a sub-committee to determine the true amount of the deficit and to acknowledge the $1 billion debt. Calvo said we don’t need to do it. He also stated publicly that he was not sure what that would accomplish.
• I asked Vice Speaker Calvo to swear in those testifying at the oversight hearing on finances. He said it wasn’t necessary. I then concluded that Calvo is part of the problem by condoning the misinformation and cover ups.
• I appeared on every talk and news show that would give me the time to discuss our government finances. I sent news releases and wrote editorials, saying that finances should be our top priority. I also wrote a weekly column in the Variety for almost two years, spending plenty of time on these kinds of issues.
• I’ve been talking about this for quite sometime now. My story has always been the same and, until recently, I’ve been completely at odds with the official position of the administration and the legislative leadership.”
Variety: If Finance Chairman Eddie Calvo would accept only one of your many suggestions, which would you tell him is most important?
Respicio: Pass Bill 37 and have the Office of Finance and Budget do a real analysis of GovGuam’s finances. It’s one of the jobs of a Legislature. Chairman Calvo has not produced his own revenue analysis for the past two fiscal years but instead, has opted to use the administration’s figures. GovGuam’s deficit ballooned as a result of years of inflated revenue estimates and was aggravated by a spending plan that ignored this reality. GovGuam experienced an added $18 million cash shortfall for FY 2006, despite him saying that we are tracking on target, and based on the current spending plan, GovGuam faces a potential $64 million cash shortfall for FY 2007.
Regular operational expenditures alone grew by over $100 million in just the past two years. This is in addition to tax refunds owed, the EITC and COLA settlements, the dump closure, and many other liabilities. We are now faced with very painful choices. If we had a realistic revenue analysis, we could have made sure that the FY 2006 and FY 2007 budgets were reasonable, and there would be no threat of layoffs. If the Legislature had its own revenue estimates, the administration would not be tempted to give us bogus figures, because we would instantly know otherwise. I hope that the next time the PDN editorializes on GovGuam’s finances, they ask why the majority blindly accepts the governor’s revenue estimates instead of providing the checks and balances as any Legislature should.”
Variety: You want to have people sworn in before they give testimony. Finance Chairman Calvo has said that these people are on live TV, held in front of an official Legislative hearing, and being recorded. Isn’t that enough of a guarantee that they would be telling the truth?
Respicio: “Every Governor’s State of Our Island Address is recorded live on TV held in front of an official legislative session and is recorded. In the 2005 State of the Island Address, Governor Camacho said that our economy was expanding and we were paying down our debt. That was not the truth. The truth is, it was not the economy but our deficit and debt that were expanding to over a billion dollars, and it was our financial rating, not our debt that was going down.
In the 2006 State of the Island Address, the governor claimed that real progress had been made in our economy and it was time to pay back tax returns, COLA and EITC, and give teachers raises. Again, that was not the truth. Our finances have made progress — they’ve gotten progressively worse —so how do we give back to the people what we owe them when we can’t make full payroll or pay vendors? And now he’s bashing the education budget, so does he want to give raises to teachers or not? People want to feel comfortable. They want to know that what they are hearing is the truth.”
(To be continued)