Proposed Guam FY ’17 budget now available on OFB website

GUAM—Following a series of comprehensive budget hearings held over the course of two months, appropriations chair Vice Speaker Benjamin J.F. Cruz filed Tuesday a substitute budget bill, unveiling a fiscal plan far different from Gov. Eddie Calvo’s Fiscal Year 2017 Executive Budget Request.

Unlike the governor’s aggressive revenue projections for the upcoming fiscal year, Cruz’s 2017 “Cut, Cap, and Balance Plan” responsibly cuts $55 million in newly proposed spending without jeopardizing current operations, lowers the cap on GovGuam’s debt ceiling, and commits to a balanced budget based on conservative revenue estimates and expenditures.

While the budget request originally proposed by Calvo projected exceptional economic growth, Cruz’s substitute budget bill reflects realistic revenue projections and “moderate growth”—as forecasted by Guam’s economic experts before the Committee on Appropriations earlier this month. Given the General Fund’s cumulative deficit of nearly $120 million, Cruz notes that continued conservatism is necessary—resulting in decreasing the Governor’s proposed General Fund revenues available for appropriation from $736.4 million to $681.2 million, or $55.2 million.

“Any budget that plans to spend more money than we can actually collect makes a promise we can’t keep, and I think we all have had enough of that,” said Cruz, who filed Substitute Bill No. 250-33 (COR) (SB250) Tuesday afternoon. “Taxpayers deserve a budget that makes sense, and that can’t happen if we rely on revenue projections that seem to make things up.”

Despite numerous budget requests above the appropriation levels originally presented in the governor’s FY 2017 EBR, Cruz’s proposal ensures that all agencies are provided with adequate funding to cover existing personnel and maintain status quo operations. Moreover, SB250 provides Calvo with extraordinary flexibility through both a lump sum budget and expanded transfer authority to address any unforeseen circumstances throughout the course of the coming fiscal year.

To protect future revenues from the crushing weight of new annual debt payments, Cruz’s measure also lowers the cap on GovGuam’s debt ceiling. With public debt at over $1.525 billion, the inclusion of Chapter 14 in SB250 reduces the government of Guam’s debt ceiling—established by the Organic Act of Guam at 10 percent of the total assessed value of taxable real property—by redefining the assessed value from 100 percent to 90 percent of the appraised value. The chapter further ensures transparency in any future borrowing legislation by prohibiting the inclusion of language authorizing adjustments to the debt ceiling.

“Every dollar we borrow needlessly today is a debt our children and grandchildren owe to someone else tomorrow,” said Cruz. “That keeps me up at night and it’s up to us to say ‘no more.’” (PR)