And the funding source is?
CUC says the central government, which owes over $11 million in unpaid utility bills, will make an initial payment of $400,000 by April 1st, and submit a payment plan for the rest of its arrears. The central government’s “awakening” seems to have been triggered by the U.S. Justice Department’s request to the federal court to step in and address the Commonwealth’s longstanding delinquency. For its part, CHCC, which owed CUC over $32 million as of January, is already making monthly payments of $525,000 as part of a negotiated agreement.
This is all good, but in the central government’s case, where will it get the funds to pay CUC?
In signing the (current) FY 2024 budget on Sept. 30, 2023, the governor noted that lawmakers failed to “meaningfully address the chronic funding shortfall for critical programs and services,” which included utility payments. The governor said although he was given 100% reprogramming authority, there was no funding available to reprogram. He reminded the Legislature “that the timely payment of the government’s usage of CUC utility services is being monitored by the federal District Court” through the two stipulated orders filed against CUC.
So again we ask, what is the governor’s funding source for the payments to CUC?
He earlier said he didn’t “want to…raise taxes…and impose the penalty on the businesses and the people of the Commonwealth because of the misappropriation [and] misdeeds [of] government officials.” And yet the governor’s “solution” to the “total financial disarray” that he (knowingly, eagerly and willingly) inherited from his predecessor is to raise taxes. The House leadership, which used to denounce its predecessor for rubber-stamping the former governor’s proposals, has passed several tax and fee hike measures without public hearings, and is now complaining about the Senate’s failure to rubber-stamp the current governor’s proposals.
So what now?
In signing the FY 2024 budget, the governor said the Legislature passed a spending measure that was not adequately funded. The lawmakers, he added, were throwing “Hail Mary passes hoping for miracles.” He said they should pass “revenue generating measures” in the first quarter of FY 2024. (The senators — much to their credit — are still reviewing the House tax-hike measures and conducting public hearings.) We are now in the last month of the second quarter. Finance said its revenue projection for the first quarter was short by over $5 million. The central government is faced with a potential $20 million deficit by the end of the fiscal year.
What should be done?
The governor should take the lead and propose significant across-the-board, cost-cutting measures that reflect actual government collections in this dreary economy. He should identify his funding priorities, propose specific cuts for the rest of the government’s spending items, and explain to the public the consequences of inaction.
The governor, in short, should exercise leadership.
Government hubris
THE Paseo De Marianas, which was completed 20 years ago at an estimated cost of $3.1 million (worth over $5 million today), is now open to vehicular traffic. It was supposed to be a “pedestrian-only mall,” which, the government in 2004 said, would turn the island into a “first class destination,” “bolster…tourism,” and “improve our economy.” None of that happened. Tourism arrivals continued to decline, and the economy would not recover until about 2012-2013, mainly because of the influx of tourists from a new market, China.
As for the commercial establishments at the Paseo de Marianas, many complained of parking issues and subsequent lack of customers and business losses. Many had to eventually shut down or relocate. For a time, the Paseo was known as a “ghost town.”
It took the government about two decades to acknowledge that it made a horrible mistake that cost millions of taxpayer dollars and harmed many businesses and their employees. Results and not intent count. When dealing with other people’s lives and/or their welfare, government officials should, for once, show some humility and proceed cautiously.
