Senators called into another special session - KUAM.com-KUAM News: On Air. Online. On Demand.

Senators called into another special session

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by Ken Quintanilla

Guam - Governor Eddie Calvo is hoping a third time's a charm. In the first budget the Democrats removed his $343 million bond proposal to pay out all past due tax refunds. His second budget restored the $343 million, but that again was shutdown by the Democrats. Then last night, the governor sent down what he calls "a compromise bill".

The island's chief executive calls his new measure a compromise by leaving the Democrats version of the budget intact with the exception of removing the lockbox provision the Administration has been critical about. The new proposal also calls for a $239 million bond, of which $187 million will go toward tax refunds and $20 million for the remainder of the COLA debt. The new bill also includes a second bond series authorization allowing the governor to go back to the bond market next January or February to pay off the remainder of the past due tax refunds and a portion of 2011 refunds.

"This is something that I did not want to do but it's the best alternative to what we have potentially in front of us," the governor said. "I made a commitment that we're not going to have this government shut down and one thing is for sure, if we don't have budget passed it will have major impacts on the people and this community." Calvo believes his new budget is a better alternative than the Democrats budget, which he vetoed last week which included the lockbox provision that diverts $100 million from the Business Privilege Tax to pay for refunds that are not due until January 2013.

The vetoed SB145 also includes Senator Ben Pangelinan's $180 million bond proposal, which pays out only $120 million in past due refunds. Republican Chris Duenas, who was an early proponent of the governor's $343 million bond, says the new bill shows great promise and appears to keep intact the governor's intentions, telling KUAM News, "The first series, certainly as its written right now takes care of all the tax refunds from 2010 and back and I think that's very important to pay our people what we owe them so it appears to be a very reasonable approach."

It was Vice Speaker B.J. Cruz who was first to caution that the governor should wait to borrow such a large amount of money until next year, after Washington begins slashing federal spending.   The vice speaker plans to amend the governor's new bill to mandate his Deficit Elimination Commission review the impacts of the federal cuts when Congress starts placing items on the chopping block in December. He said, "I'm just concerned about my major issue whether its fiscally responsible to do anything right now or just wait but if they want to go forward, the second series needs to be contingent on waiting for our Deficit Elimination Commission to look and see what the U.S. Congress has done."

Duenas added that the Legislature is working on the details of Bill 1-2-S and will communicate back to the Governor's Office of any concerns they might have. Governor Calvo believes his new bill is a better option than the one he vetoed.

Should the governor's compromise budget fail during special session, senators will revert back to regular session during which the Democrats will push for another override of the governor's veto of Substitute Bill 145. The Democrats need ten votes for the override. Currently all eight who voted in favor of its passage are on island, and they need two more votes to join them.

Democrat Dennis Rodriguez, Jr. is currently off-island, which means as it stands today-two republicans have to switch sides and change their vote to yes.

And an interesting twist to the balancing act: the GovGuam Retirement Fund has sent a letter to both the legislature and the governor expressing their concerns that all of the budget bills they have been entertaining do not include provisions to address outstanding employer and employee contributions. The Retirement Fund warns that should a bond measure be passed which does not adequately pay down the outstanding contributions plus interest. The Fund will contend that the Health Insurance Bailout Agreement of Fiscal Year 2011 has been breached.

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