In September 2019, the Government of Guam enacted a budget plan into law that authorized spending $954 million in local and federal funds for this budget year.
Nearly a year later, Guam senators face the task of passing another budget bill that will be up to the governor to sign into law or recommend for changes.
They have about 20 days left to do this before the Aug. 31 deadline for the new budget year that begins on Oct. 1.
Despite the looming deadline, they should not create a spending law for the sake of having one – even when facing a deadline.
One option for GovGuam would be to go with an initial budget on a month-by-month basis, so that the spending stays fluid and may be easily adjusted based on real cash collections.
Based on the governor's proposed budget, which suggests a grand total of $949,368,355 would be available for fiscal year 2021, including $110 million in federal grants-in-aid revenue, the local government still could end up with a budget that's not drastically lower than the previous budget year's total.
Without getting into the details, it's probably safe to project GovGuam will not have nearly a billion dollars to spend this coming budget year.
The COVID-19 economic downturn has made that apparent.
One of the economy's two main engines is practically comatose, waiting to be resuscitated at an unknown date through the revival of international tourists' appetite for travel, which might happen slowly and possibly only if there's convincing proof that a COVID-19 vaccine is right around the corner.
GovGuam's coffers are getting a temporary infusion from the federal government now, giving it a sense of near normalcy, funding-wise.
But based on the impasse in Congress last weekend to pass another round of CARES Act funding to help those who are still unemployed and to help businesses that are struggling, the federal government's ability and enthusiasm to pass more legislation that would dole out significant chunks of cash to GovGuam and island residents remain foggy.
We urge Guam senators to level with the public as their budget discussions begin as soon as today.
We urge senators to talk about the challenges that lie ahead and discuss proactive initiatives, such as timelines for GovGuam furloughs or job-shedding – in the event they become necessary – and other cost-cutting measures that will need planning and a series of notification processes before they can be implemented.
What we don't want to see and hear is senators, as they face reelection, ignoring the elephant in the room that is our economic decline and its effect on government cash collections.
Businesses are closing down or have closed down. Our tourism industry will not see 1.6 million tourists in the approaching fiscal year and the Guam Visitors Bureau is – at best – projecting just a fraction of that total, at 400,000 arrivals.
So with 1.2 million tourists who will not be arriving and will not be spending $600 million in the local economy, at an average loss of $500 per tourist, GovGuam's estimate that $949 million will still be available to spend in the budget year that starts in October reflects a denial, if not a defiance, of reality.