By Mar-Vic Cagurangan
Variety News Staff

GOVERNOR Felix P. Camacho yesterday lashed back at the Legislature, accusing senators of stalling the budget process while reiterating his warning to push ahead with the retrenchment option if the administration’s revised budget proposal is not acted upon before April 1.
“Our group came up with what we thought was a good, revised fiscal year 2007 budget that will be least harmful to the community.  Now the bill is caught up in the destructive politics of the Legislature and time is running out,” Camacho said in a speech before the Rotary Club of Guam at the Hilton Guam Resort and Spa. 
“If this bill is killed, we will have no option but to lay off personnel,” the governor warned.
The Legislature went into recess yesterday afternoon, still confused by the numbers that the administration provided. Senators found more discrepancies between figures in Bill 74, the revised budget measure, and the spreadsheet presented by administration officials yesterday.
At the Rotary Club, Camacho said he has instructed the budget office to give each agency a ceiling based on cuts.
“In the event the Legislature does not balance this budget, agencies must first cut operations and then move to personnel cuts if necessary.  The Department of Administration is working with agencies on the furlough process — but that remains the option of last resort,” the governor said.
Camacho also defended his  proposal to raise the gross receipt tax by 1 percent, saying it is an  alternative more workable than the lifting of tax exemptions and furloughs.
“The GRT increase is a small, temporary adjustment to the revenue base we’re proposing because the Guam Chamber of Commerce says we shouldn’t remove tax exemptions and furloughs will not be good for the economy,” Camacho said. 
“Abrupt, massive layoffs will affect the buying power of your customers, not to mention the negative impact such a move will have on families, public assistance spending and government revenues,” he added.
Hounded by the jabs received by the 27th Legislature when it raised the GRT from 4 percent to 6 percent, senators now seem reluctant to grant the governor’s request for a new GRT increase.
But Camacho said the government’s current fiscal condition calls for tough choices, bi-partisan cooperation and compromise.
“The government needs to make the hard decisions so it can start making the lasting changes that will end decades of poor fiscal health.  We need to get through this current crisis so we can begin making those changes in the fiscal year 2008 budget, when our long-term plan for fiscal recovery will correct the structural imbalances that are crippling this government,” he said.
As for the revenue projection, the governor turned the tables on the Legislature for its alleged over optimism.
“The Office of Finance and Budget may believe revenues still will materialize at $450 million, but I caution senators to consider the consequences of yet another overly optimistic revenue projection, especially when numbers for half the year are in front of us,” Camacho said.
He said three revenue forecasts based on revenue tracking compiled by the Department of Administration and other financial experts, the Bureau of Budget and Management Research and by chief economist Gary Hiles and University of Guam’s Dave O’Brien and Guam Community College’s Mary Okada independently arrived at a realistic $434 million revenue projection with a growth rate of 3 to 4 percent.