They succumbed to the governor’s lobbying effort that generated threats from voters largely ignorant of the full implications of their actions.
This editorial may enlighten some of those voters, though I doubt whether they’re interested. It does provide some verified facts to consider. The information has all been available since Standard & Poor’s published a report on Guam debt earlier this year, but perhaps not everyone has seen it or understood the implications — or cared.
To properly evaluate GovGuam public debt, with borrowing capped at 10 percent of taxable property in Guam, we apply commonly accepted benchmark values derived by the rating agency over several decades. Available space doesn’t allow for a look at everything, but let’s consider some of the more significant points.
Take the GovGuam pension fund, for starters, with $1.44 billion of unfunded pension liability. S&P considers an unfunded liability per capita above $3,500 “Weak”; its worst category. Guam comes in at over $8,500, nearly three times that value. It also equates to 65 percent of Guam residents’ average annual personal income — more than nine times what Standard & Poor’s considers to be a “weak” ratio. Some S&P comments and findings:
“Revenue and spending assumptions tend to be somewhat aggressive and not entirely based on reality …”
“No formal debt management plan exists and a framework for establishing and replenishing reserves is inconsistent and not functioning.”
S&P found that the Guam government’s credit rating remains “highly speculative,” with a general obligation bond rating at least 4 grades below investment grade: “Junk,” in the industry vernacular.
GovGuam received the worst possible score in the category of “debt and liability”. Its off-the-chart taxpayer-supported debt — $772 million — equates to $4,226 in government debt for every man, woman and child now resident. That figure takes on added significance when coupled with a personal income level a third of the national average. Less than 2 percent is considered a low amount and anything over 7 percent is considered high. GovGuam debt is again off the charts at 33 percent of personal income, not including the horrific pension fund unfunded liability.
GovGuam received low scores in just about everything, including financial management, governmental framework, and the economy. That’s not all by any means, but should provide a general idea of how well GovGuam manages your tax money — and that of stateside taxpayers which we receive in great abundance — and where all this might be heading.
We’ve just passed another decision point that could have allowed our elected officials to exercise mature judgment and accept responsibility. That didn’t happen. They opted instead to increase the already staggering taxpayer-funded debt burden based on some smoke-and-mirrors scheme to again artificially revalue Island property upward when financial indicators and personal experience tell us that values are actually down. Remember, please, that many of these are the same folks the federal court found to have violated their oaths of office not long ago.
There’s little doubt about GovGuam’s financial future. Band-aid fixes for this mortal wound won’t make it go away.
Bankruptcy seems inevitable. And while I’m on the subject, those who laud this abomination as “good for the people” are either lying, stupid or ignorant — or all three. It’s simply near-term gratification for the few at the expense of the many. It’s clear that if our politicians had the guts to present a realistic debt and deficit proposal that made sense they’d be out of a job.
DAVE DAVID
Yigo, Guam
