This week's address from Governor Eddie Baza Calvo is a question and answer session focusing on his spending cuts proposal, which will start to receive public hearings this week. A transcript of the conversation follows:
Q: Governor Calvo, why do we need to cut spending?
A: So that we can get tax refunds to the people – money back to the people. Probably the question is: how do you equate providing better services in critical areas such as health, education, safety, or getting tax refunds back to the people – how do you equate that with cutting costs? Well, unfortunately, it was because of bad management of our finances in the past, bad budgeting, overestimation of revenues, not focusing on critical services – that put us in a position where we had a lack of nurses. Or we had policemen that didn't have the necessary tools so that they could protect the public and themselves. Or we had firemen but no ambulances. Or we had people – regular people, the common man – having to wait four or five years to get a tax refund: money that was theirs. That's why we have to make cuts.
Q: Is there a way to catch up with all tax refunds, reinstitute the increments, pay the Hay Plan, hire police officers, pay teachers more, and buy the construction equipment that we need to build more village streets without cutting spending?
A: The original plan we had was toget ourselves out of the financial hole that we were in. We had inherited three consecutive years of bad budgets that were put forward and adopted by the previous and by this legislature, the majority – that had put us in a hole of over $300 million. And when I talk about a hole, I mean a deficit. We had a plan to pay off all those past due obligations, that deficit. Most of it, of course, was tax refunds. That was through selling the bonds at low, favorable interest rates that would pay off these tax refunds and these debts. And, as boring as these explanations sound on budgeting, they're the important blueprint and framework moving forward. So that we can provide adequate resources for our police, for our firefighters, for our schools. And we have the adequate reserves to pay tax refunds in the same year that they are filed by our people.
Q: So it's not possible to do all of these things without cutting spending elsewhere?
A: The only other way to do it, is increase taxes.
Q: Will you increase taxes?
A: It was government that got us into this mess in the first place. No. Tax increases are not a viable option – either economically, for growing our economy, nor for the people. We've had enough on their backs. So in order to get people their tax refunds back, we tax them? That doesn't make sense. And you have a commitment from this administration that tax increases will not be an option.
Q: Do you still come across struggling families who need their refunds, and if you do, what do they say to you? What are some of their struggles?
A: When I'm out, I talk to people. They come up to me and say, "Governor, I filed (my tax return) in April. I'm waiting for my tax refund." And I can tell them they're going to get it, they're gonna get it this year. But for many of them, the reason why they're asking, is because they're hurting. For some of them, it's been...they've got some medical procedures that they have to undergo – or their family members. For some of them, boy, those power bills – they have to pay that power bill or that rent. For some of them, it's school starting. And they've gotta get those necessary supplies for their kids. People that come up to me with all humility, and ask me for money that is rightfully theirs. This is something that I've seen and experienced after the past two years. It's unfortunate that some of the leadership in the Legislature did not feel that type of – whether you call it sympathy, or at least compassion, for all these people that had been waiting for so many years for their tax refunds.
Q: Finally, Governor, could I ask of you could give your message to the Legislature about what you'd like them to do with your spending cuts bill?
Again, I'd like to acknowledge and welcome my fellow public servants at the Guam Legislature. And I fully understand that we are separate branches of government. And each has a role. And with that, I understand, and I also respect the importance of our Legislature – the single most powerful policy making body in this government. You have my commitment and my sincere wish and desire to work with you toward providing better services to the people. But you've also seen the situation out there. The same individuals that come to me asking for tax refunds, they've also visited your office. You see the pain that many of them are experiencing. I'm asking you, let's not repeat the mistakes of the past. We have a viable spending cuts bill that will wipe out most of this accumulated deficit that has built over the years. It's a spending cuts bill that will also pave the way so moving forward, we will have enough resources for tax refunds to the people. But I know, in order to get these tax refunds, we have to make reductions in other areas. And I understand that making cuts are very difficult. But we also understand that some of these tough decisions need to be made. Sometimes the medicine is bitter, but the rewards of taking that medicine in the long run, are to the best interest of the patient. And in this particular instance, our spending cuts bill will be in the best longterm interest of this government, but most importantly, to our taxpayers: the people of Guam.