Governor's Weekly Radio Address - Apr 11
Streamlining for Efficiency; Borrowing to Make It All Work
By Eddie Baza Calvo
My fellow Guamanians,
I realize that the first criticism of floating a bond to pay tax refunds is that the government should exercise more political will to cut. Another would be ‘Why are we going to borrow money when we haven't done anything to make government better?' This is why we are pursuing cuts. We started at the top by cutting senior staffers at Adelup. We made the Cabinet lean. We axed non-essential travel. We cut the size of the unclassified workforce. We're holding the line on spending throughout the government.
The $348 million deficit is about two-thirds of the annual operating budget for the government. $280 million of that deficit is directly owed to you in tax refunds. If we pay it all at one time by cutting government spending, we would have to shut down all public schools, the colleges, the hospital, the mayors offices, public welfare, public health, mental health services, the election commission, the labor department, land management, parks and recreation, public works, the Governor's Office and veterans affairs. We would only have enough money to pay our debt service obligations and to keep public safety services, the Attorney General, the Courts and the Legislature open. Or, if we decided not to pay the deficit, you will continue waiting two to three years for your tax refunds and the government will pay interest on it as though it were paying a bond anyway. Thousands in the private sector and retirees will suffer from government's inability to pay its bills. And there will continuously be cash shortages in MIP, education, the hospital, and the list goes on. I'd rather borrow from the bank than borrow from you - the people.
There are three truths to the size of the government of Guam. The first truth is that the cost of personnel makes up almost all of the budget. The second truth is that, of this amount, the great majority is spent to pay the salaries of teachers, other faculty, school staff and administrators, nurses, doctors, hospital professionals, public health professionals, mental health professionals, social workers, law enforcement officials, public safety officers, engineers, planners, accountants, finance and budget officers, revenue and taxation officers, prosecutors and mayors' office personnel.
The third truth is that the government needs more teachers, public safety officers, health providers and other professionals. We need them in order to provide the services mandated by law and in growing demand by the community. What is most alarming is that we need more of these professionals to serve today's growing community. This does not even take into account the demands the government will face two to five years from now, when the population is expected to begin booming.
Essentially, the service levels this government must provide needs to grow. There's no way around that. This is a growing community. That doesn't mean the workforce needs to grow immediately, or that agency budgets must dramatically be increased at one time. No, it simply means we need to bridge this dilemma by improving customer service, providing more convenient online services, reorganizing and retraining to improve skills.
Some may ask why we don't make wholesale cuts in personnel in order to save money. Some will use vague examples of private sector companies that have to lay people off.
Any good manager knows that the most important asset of a company is its employees. The companies who just lay people off to save money are the ones doomed to failure, or the ones that just come to Guam for a quick buck and leave without any regard for the people they hire and fire. As for the urban legend that there are thousands of government employees who don't come to work or who just sit around, that is an unfair stereotype. I can also tell you that most of these workers are overworked and underpaid. And to be fair, there are a few bad apples that spoil the bunch and give the rest of the GovGuam workforce a bad name. We are instituting a customer service policy to identify these issues and correct them.
We are looking at reorganizing and outsourcing as ways to make government more efficient. That process takes time, but we have to pay our bills now. It also won't make a sizable dent in the deficit, because we'd still have to pay for the outsourced contracts. But we are pursuing these methods because, ultimately, we want government to be more efficient in the long term. We're going to borrow this money to bridge us to a better future, so we can start focusing resources on the future. But we want to make sure that the government of the future is lean and has no need to borrow money again.
This is probably the greatest criticism of borrowing. I get it. It angers me that we're left with no other choice than to borrow. You're right when you say that government has done this before just to pull itself out of the hole it dug itself in. What's changed about this argument? Your leaders have. I'm a new governor, and there is a new legislature. What I am asking is for your support and your trust to make this work. I'm a manager by profession, and I have a track record of being fiscally responsible. Together with Senator Pangelinan, a leader committed to paying the government's bills to you, we will fix the 20-year-old fiscal problem. We're already showing that we can. In my short time as governor, we've been making cuts. We've been transparent and accountable. We've been more engaged with the community and more proactive in solving problems. This is the plan that will put us back on the road to financial health and keep us there. This is the plan that will pay you back what this government has withheld from you for too long.
Saina Ma'ase, Si Yu'os en Fan'binendisi and God bless.