Clock is ticking on $600M spending plan, GovGuam budget

APPLYING FOR AID: A long line of people wait to enter the Pandemic Unemployment Assistance Center at Guam Community College in Mangilao on July 29, 2020. Post file photo

By the end of the month, the Guam Legislature has to submit a budget to the governor's office.

That may prove to be a little tough, as noted by senators who are waiting on the governor's spending plan for $600 million in American Rescue Plan funds – which some government agencies are banking on to fund some of their operational and other needs in the upcoming fiscal year.

The fiscal 2022 budget year starts Oct. 1, 2021. By law, the Legislature submits the budget by the end of August to the governor, who then has 10 days to veto, sign or allow the budget bill to lapse into law.

The budget bill determines how much money is provided to each government branch, and executive agency and office to support services to the people of Guam. It also sets aside the funds for tax refunds and payments for various bonds that the government owes.

A large part of the government's budget for next fiscal year is ARP. Senators had asked Gov. Lou Leon Guerrero what the administration's plans were for the funds and she asked them to submit their list of priorities. After a meeting a couple of months ago, the governor told senators she'd provide a plan that lists the administration's priorities for spending.

Adelup hasn't submitted a plan yet.

Speaker Therese Terlaje has told The Guam Daily Post that without "full transparency as to the administration's planned use of federal funds, our fiscal year 2022 budget will be guesswork."

On Monday morning, during discussion on a bill that would repeal the assessment of business privilege tax and use taxes on medical equipment and telemedicine technology, Speaker Terlaje noted the need to better understand where government of Guam's finances stand as the Legislature prepares to finalize the budget bill.

"We are just about to go into a budget (session) and we do not know the revenue and how we are going to fund the rest of the government yet. We have not hashed that out," she said. "In fact, in the last June (Consolidated Revenue and Expenditure Report), which is the report that shows our (collection levels), business privilege tax was tracking $24 million below what was expected."

Part of the puzzle is the scarcity of information on the impact the lack of federal programs like the Pandemic Unemployment Act will have on the government's collections. In addition to helping local residents, PUA has also contributed to local tax collections.

And with an economy that's still sluggish from the pandemic, it's not clear how the government's revenues will look in the coming fiscal year.

"We have families in need, industries to recover and we need the information now to ensure we take care of these needs," Speaker Terlaje has said.

Still waiting

Meanwhile, various agencies, including the Department of Public Health and Social Services, as well as Guam Memorial Hospital, have decreased their reliance on local funds, saying federal funds including ARP will be utilized.

DPHSS' request for fiscal 2022 falls short of operational needs by $17.8 million, which DPHSS officials said they hope will be covered by ARP funds.

But the question as to whether they can rely on ARP funds has yet to be answered.

The governor said she's waiting on the final guidance from the federal government. Governor's communications director Krystal Paco-San Agustin said they hope to get the rules this month.

Meanwhile, other states and territories are using ARP funds in line with interim final guidelines provided by the U.S. Treasury on July 19.

Hopefully, the administration and the Legislature come together in time to finalize a budget that meets the needs of a community still reeling from lost jobs and soon to feel the full brunt of the pandemic-slammed economy without the buffer of federal help to thousands of residents and businesses.

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