HAGÅTÑA (The Guam Daily Post) — Gov. Lou Leon Guerrero declined to sign off on the government of Guam’s $1.1 billion budget, taking issue with spending decisions at the Legislature for the second year in a row.
Leon Guerrero stopped short of vetoing the fiscal year 2024 budget act, and will instead let it lapse into law without her signature.
“The Budget Act adopts realistic revenue projections and line agency budgets, and funds important initiatives, including law enforcement recruitment, the new General Pay Plan, and retirees health, dental and life insurance. However, as noted below, certain provisions in the bill must be corrected immediately to ensure the continued viability of our government’s finances,” Leon Guerrero wrote in a letter to Speaker Therese Terlaje.
One big point of contention was the continued practice of lawmakers trying to tap into excess GovGuam revenues that have yet to be confirmed by an audit.
Though GovGuam raked in more taxes and fees than expected in fiscal year 2022, the amount of actual cash available is unclear until the completion of the annual governmentwide audit, which remained outstanding as of Tuesday. Leon Guerrero noted that senators wrote into the budget about $19 million worth of expenditures from that pot of money.
It’s a repeat of actions taken during last year’s budget talks, which, based on currently available information, already depleted that excess revenue source, Leon Guerrero wrote. Additional appropriations are “effectively empty promises to the affected government entities and programs,” the governor said, which threaten to plunge GovGuam’s general fund back into a deficit.
The governor is not the only elected official who has objected to the spending of unaudited revenue. All six members of the minority Republican Caucus in the Legislature voted against the budget bill on similar grounds.
Leon Guerrero also disagreed with senators tying spending for Typhoon Mawar recovery to the government’s Rainy Day Fund, which is meant for emergency cash shortages.
Lawmakers in the aftermath of Mawar authorized Leon Guerrero to transfer up to $50 million from any available source to deal with recovery from the typhoon. But lawmakers and Adelup have been butting heads over the decision to transfer $20 million from the Guam Department of Education for repairs.
Speaker Terlaje in the budget act instead tied additional typhoon spending to the Rainy Day Fund, which the governor called an inappropriate decision given GovGuam’s still stable financial situation.
“Such funds are primarily utilized in response to extreme economic crises, such as a recession, when revenues take an unexpected and rapid decline. While such funds may be used following a natural disaster, they should not be tapped capriciously. Utilizing the Rainy Day Fund should be an option of last resort, when no other funding source is available,” Leon Guerrero said, and could ruin the government’s credit.
She called on lawmakers to repeal the Rainy Day Fund provision from the law.
Finally, the governor objected to a mandate in the budget act to pay out merit bonuses that have rolled over from the Calvo administration. No money was provided for the merit bonuses, and agencies did not account for them when making budget requests. A total of $6 million was owed in merit bonuses in March, the Post reported.
“Our executive branch agencies should not be expected to pay for the failed policies of past administrations, especially when doing so may impact current operations and, ultimately, the provision of critical services to the community,” the governor wrote.
She concluded that, “if the Legislature intends to pay merit bonuses to employees for exemplary work earned and recognized in prior years, it should appropriate from an available funding source for that purpose.”
The Ricardo J. Bordallo Governor’s Complex is seen Sunday, Aug. 13, 2023, in Adelup.
