‘Redirected’: LEAP funding faces hurdles

HAGÅTÑA (The Guam Daily Post) — Another round of local aid to employers faces some stumbling blocks in the wake of a government of Guam cash crunch after Typhoon Mawar.

Though he would not rule out the possibility of businesses getting help through the Local Employers Assistance Program, Lester Carlson, director of the Bureau of Budget and Management Research, told The Guam Daily Post that funding relief for business owners is not his first priority after Mawar.

“My focus is on recovery,” he said.

The Local Employers Assistance Program, or LEAP, paid out $62 million to businesses last year, in hope of helping them keep their employees on payroll. This year, employers who said they continued to struggle in the wake of the COVID-19 pandemic began lobbying for a second round of the program.

Lawmakers passed a $20 million second round of LEAP in May, but were banking on GovGuam continuing to rake in more tax revenue than expected through the end of the year in order to fund the program.

Then Mawar struck the island.

With senators authorizing Gov. Lou Leon Guerrero to spend $50 million on Mawar relief last week, GovGuam is now projected to spend $14 million more than it actually rakes in this year.

Fiscal discipline

Carlson said it will take a large amount of fiscal discipline to ensure the local government, which is hoping to get the Federal Emergency Management Agency to reimburse much of that $50 million in local spending, doesn’t end up with a deficit in its general fund by the end of the fiscal year.

A quarter of the $20 million LEAP will come from federal American Rescue Plan funding under the governor’s purview, and is secure. But the remaining $15 million for the program will have to come from local tax revenue.

Carlson said he’s already ordered agencies to stop purchasing vehicles and making other capital expenditures, in order to find money to spend on Mawar relief, adding, “I can’t muster together $50 million and promise that I’ll have the wherewithal to find another $15 (million).”

He said businesses will “unfortunately, but fortunately,” receive a large amount of federal disaster relief from the Small Business Administration, and are encouraged to apply for the “generous” aid.

Low-interest loans of up to $2 million are available for businesses to offset damaged property, equipment and inventory. Another loan of up to $2 million is available to offset any loss of revenue in the wake of Mawar.

It is possible that another $15 million in ARP money could be redirected toward LEAP, Carlson said, and late last month he told Republican Minority Leader Sen. Frank Blas Jr. that he would speak with the governor on the matter.

“We put in $36.5 million (of ARP) into the first round (of LEAP) and I don’t know what else to say,” he said when the Post asked about that possibility this week.

“I get my $50 (million) together, and we have the funding available to address recovery, and – now, later on – we find out that we can afford the $15 million, then fine. But for right now, … those resources are being redirected toward recovery.”