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Adelup submitting Supplemental Authorization Act

by Mindy Aguon

Guam - The Calvo-Tenorio Administration will submit a $30 million supplemental authorization budget to lawmakers on Tuesday as they seek to address the major cash crisis of the Government of Guam. With a confirmed $348 million deficit - $83 million of which was incurred in the last fiscal year alone and $55 million in cash that was meant for this current year that went to pay for prior year bills this fiscal year, the administration says the situation calls for lawmakers to take action immediately on a supplemental request. 

Hoping to clear up allegations that GovGuam is collecting millions of dollars more than it anticipated, governor's spokesperson Troy Torres says the island's public sector may have had a $1.3 million surplus in revenues at the end of the 2nd quarter, but he encourages lawmakers and residents not to be misled. "While there may be a $1.375 million surplus by the end of March 31, 2011 this government is tracking revenues general fund revenues at $635 million for this fiscal year but it appropriated or I'm sorry it adopted revenues of $657 million. As of today we're looking at a $22 million shortfall this fiscal year," he said.

Torres says there is a major cash crisis in the government and that $22 million shortfall doesn't include the unfunded liabilities for the current fiscal year. That's why the Calvo Administration will be submitting a $30 million supplemental authorization that they contend needs to be approved by lawmakers by June 1 to help with the cash crunch.

"The fiscal team has come forward with a supplemental appropriations act to help to fix this year's shortfall because there are major shortfalls," he added.

So how does the administration intend to fund this additional authorization request? Said Torres, "As I understand it, there are a host of accounting solutions to this including calling in some debts from agencies." The money would go to pay the $11 million in unfunded health insurance premiums as current authorization runs out in June, money for the amended permanent injunction, overtime for Department of Corrections and police officers, as well as appropriations for the Guam Memorial Hospital and the Department of Education.

While some have criticized the administration for not being forthcoming with the numbers - specifically Finance and Taxation Committee chair Senator Ben Pangelinan, even accusing the administration of using money that should go to tax refunds to pay health insurance and other things - Torres says the validated information says otherwise.

He explained, "The cash that's supposed to go to tax refunds is funding the operational shortfalls of the Government of Guam and the checks that were floated and the interfund borrowings from the restricted cash accounts."

Torres and DOA Deputy Financial Manager Kathy Kakigi explained that when the Calvo Administration took over in January, they were left with a financial mess - $14 million in floated checks that had to be paid, $8.5 million in interfund borrowing from restricted cash accounts and $55 million worth of prior year bills that were paid with current year appropriations.

She told KUAM News, "Instead of monies going to pay for critical operations, we had to address the float amount first, which is the $14 million, so you're talking about cash from current year revenues going to pay down this float as opposed to paying operations that are scheduled in the budget for the month of January."

Torres adding the government's current financial situation is something that the governor and others have warned about for several years. "Then senator-Calvo, then-senator Tenorio as well as Senator Frank Blas, Jr. were completely opposed to this budget and to the previous budget for these reasons and they said so and made no secret about it," said Torres.

The administration is hopeful lawmakers will review the Supplemental Authorization Act immediately, as they are currently in session.

Now, one of the solutions that administration is looking at is having autonomous agencies pay what they owe to the government. As we reported several weeks ago, the Department of Administration submitted invoices to the port authority, the airport and the Guam Power Authority for $12 million each as they sought to enforce a law that required payments in lieu of taxes from these agencies. 

Kakigi said today that one of the agencies had indicated they will make a partial payment but she would not disclose which agency. 

KUAM News contacted the port and airport that confirmed they had not changed their position in disputing the invoices. GPA meanwhile is still disputing the total amount owed but they do recognize that the law will be implemented going forward, and CCU chairman Simon Sanchez says the $800,000 for this year would likely be paid eventually.

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