Officials: Furloughs inevitable

CRUZ: Speaker Benjamin Cruz questions Bureau of Budget and Management Research Deputy Director Lester Carlson during a hearing April 12 at the Guam Congress Building in Hagåtña. Post file photo

The governor's office on Thursday warned that precincts face consolidations to reduce utilities costs and police officers face reduced work hours and less pay.

Without a solution to the government's projected revenue shortfall for the next spending year, which begins Oct. 1, the governor's office warned, the Guam Police Department's "hardest hit" would be the continuous furlough of 24 sworn officers, and the reduced 32-hour workweek for 279 sworn officers.

"With a reduced police force, the department will have to change the way it manages available personnel," stated the governor's press release. "Police visibility will be heavily reduced ... This will also mean a delay in response times from patrol officers as calls will now need to be prioritized on a case by case basis; case closures and case management would require the same type of prioritization."

Two budget versions proposed

With the projected budget shortfall of about $145 million, by Speaker Benjamin Cruz's estimate, Cruz on Thursday offered two proposed budget versions for senators to consider.

One includes the speaker’s proposed increase in the business privilege tax to 5.5 percent, while the other does not. Public Law 34-87 imposed a temporary increase in the tax on April 1, from 4 to 5 percent. The tax would revert to 4 percent on Oct. 1, unless another law changes it.

The choice, Cruz said in a press release, is between the “responsible” budget which includes the tax increase, and a “reckless” budget that includes no new revenues to make up for the projected $145 million revenue shortfall brought on by the Trump tax cuts.

Each choice is in separate bills.

Bill 323-34 includes the proposed 5.5 percent BPT. The speaker calls this measure the responsible choice because it adopts a balanced approach that makes up for the revenue loss by reducing spending, and raising funds with the BPT increase.

The alternative is Bill 237-34, which the speaker characterizes as “reckless” because it cuts $145 million in spending that he said would result in the reduction of basic services in education, health and safety.

Cruz is the chairman of the appropriations committee and by law he must present a balanced budget for consideration and get it passed and presented to the governor before the end of August.

“Tax reform allowed all of us ... to keep more of the money we make,” Cruz said, in part, referring to the federal tax cuts.

The government must now do the same job with millions of dollars less, the speaker stated in his release.

“We have two options. We can make responsible choices knowing they’re unpopular, or we can make popular choices knowing they’re irresponsible,” said Cruz.

Two public hearings on the bills have been scheduled for July 19 at the Legislature, one hearing at 2 p.m. and the other at 6 p.m.