HAGÅTÑA (The Guam Daily Post) — Lawmakers spent the opening rounds of this year’s budget talks going back and forth over how appropriate a proposed $146 million increase to the government of Guam spending plan is in the upcoming fiscal year.
Discussions kicked off Wednesday afternoon and continued into Thursday.
GovGuam went into the current fiscal year with a budget of over $1 billion, and the new budget act put forth by the Legislature’s Office of Finance and Budget would kick that sum up to a bit over $1.16 billion in fiscal 2024. That sum is $44 million more than what even Gov. Lou Leon Guerrero requested for the upcoming year.
But OFB Director Stephen Guerrero told lawmakers that, even with the large increase in the budget submission, projections for taxes and fees that could be raked in by GovGuam are conservative.
Several Republican lawmakers disagreed with that assessment.
“Some of the amounts that you see … are still below what we are tracking,” Guerrero said. “But again, being a conservative type … what we did is we looked at the tracking and said, you know, let’s bring it down a little bit … just to be on the safe side.”
He pointed to the $10 million in extra tax revenue that GovGuam has been collecting monthly on average this fiscal year, and what are expected to be large increases in corporate and withholding taxes moving forward, as well as a rebounding tourism industry and an increase in military construction awards.
“We’ve seen increases in tourism, we’ve seen increases in military activity and, despite all the challenges, I believe people out there – the economy is still basically growing,” Guerrero said.
‘We’ve been living large’
But Sen. Telo Taitague, co-chair of the Legislature’s budget committee, raised a number of concerns with the costlier legislation, stating Guam’s current economy is “artificial” and buoyed by billions of dollars in federal spending to the island, much of which is going to dry up in the wake of the COVID-19 pandemic.
“The way I see it here, … we’ve been living large for the last three years, and I don’t see our economy growing,” Taitague told Guerrero. “I see our government growing, you know, more expenses and then falling short.”
The Republican senator last year voted against the current fiscal 2023 budget act, taking issue with the island government continually growing through the pandemic years, despite government shutdowns. Sitting Republican Sens. Frank Blas Jr., Joanne Brown and Chris Duenas likewise voted against the current budget act. So did Democrat Speaker Therese Terlaje, although not explicitly because of high GovGuam expenditures.
Taitague this week said the growing government would lead to more expenditures that were started with federal funds, but became local obligations.
“That’s something that we can’t afford to do,” she said.
A conservative budget, with a cushion of between $30 million and $40 million in excess revenue at the end of the fiscal year, would be more reasonable, Taitague argued.
Spending to ‘score the political points’
Freshman Democrat Sen. Will Parkinson, on the other hand, railed against that line of thinking, stating that an overly conservative budget would have unintended consequences come next year, when senators rush to spend excess tax dollars that come in but are unaccounted for.
Excess tax revenue that was raked in this fiscal year went toward a number of multimillion-dollar programs stood up by lawmakers at the start of the term, such as using $15 million to extend a local power rebate program, or $20 million for school repairs.
“We are all scrambling as fast as we possibly can to spend it as quick as possible and score the political points,” said Parkinson. “And I do not like these ad hoc budgets.”
Debate on the measure continued into Thursday afternoon.
“If there is again a $100 million surplus from the budget projections, it would be chaos this next spring and an unnecessary injection of politics as this money will be rushed to be spent. … Let’s get this budget accurate, so we’re not having these huge surpluses at the end of the year that we’re all trying to play political football with,” Parkinson added.
Funding sources
Most of the funds outlined in the GovGuam budget proposal come from three sources:
• General Fund revenue available for appropriation – $812.3 million.
• Special funds revenue – $211.5 million.
• Federal matching grants in aid – $145.1 million.
Sens. Telo Taitague, left, and Chris Barnett look over a document during legislative discussions on the fiscal year 2024 budget bill Thursday, Aug. 10, 2023.
