Governor's Weekly Radio Address - August 8
Fixing the Government (Part 1)
By Eddie Baza Calvo
We've had the ability to govern ourselves for 61 years. That's 61 years of a growing population, and 61 years of growing government. But, government's growth should not be mistaken for healthy change. Over those 61 years, mandate was piled on top of mandate. New positions were created to meet these mandates. Government got involved in new things. It was treated as a problem solver, yet today's problems far outnumber the problems of yesteryears.
Back in the days of smaller government, people were not living in poverty. Homelessness was unheard of. Public assistance was for the few who just couldn't make it. Schools were being built. New roads were being constructed. Guam was changing with the times, and so was government.
Today the opposite is true. There is poverty in nearly every community. Government is nearly broken… its capacity barely able to provide the services all those laws mandate. In its zeal to fix problems, it has become too big. It has spread too thin. It has become an employment agency that doesn't really know if it has the money to make payroll every two weeks.
While government's leaders refused to make the tough choices when it became apparent that growing the government was the wrong course, there was something that did change. For 41 years, your government was able to tax you, and then refund what you overpaid in taxes. 20 years ago, that changed. 1991 was the last year government was able to pay tax refunds to everyone on time. We've been paying high interest on those overdue tax refunds ever since. It was like we paid a bond, but you were the financier, not the bank. Today's bill to you is $280 million.
Six years before that, the United States signed a compact with the freely associated states of Micronesia. That set the stage for unprecedented migration and population growth. The U.S. government, including people in the Interior Department who are supposed to be sympathetic to Guam considering their ties here, has been remiss in their obligations under the compacts. So, the increased use of government services and public assistance became a matter for Governor Ada, Governor Gutierrez, Governor Camacho and every Legislature in between to deal with.
And so, here we are. We owe you $280 million in refunds, and our deficit will probably be close to $400 million by October 1 this year. We will never get out of this hole with the current size of the government for one very fundamental reason: The cost of providing every government mandate and service is far more expensive than the amount of cash coming in to the Treasury.
It's time to roll back government and to make the hard decisions. We've had seven months to assess government operations and to study the balance sheets. My directors are fully aware of what works and what doesn't. In those seven months, I've also been a big fan of Newstalk K57, the Buzz, and the message boards on PDN, the Variety and KUAM. I've intently read your emails with suggestions. I've personally read your requests for tax refunds, and I've paid attention to what you've told me when we met at a function or at one of our walks through the villages. More than that, this government has been receiving suggestions for change for 61 years. It's high time someone does something about all these great ideas.
On Saturday, Lt. Governor Tenorio, our senior staff, the Cabinet and I took the first steps toward meaningful change. Under the Organic Act, the Governor has a duty - not just a power, but a duty - to assess and reorganize the government from time to time. For the first time, I will be exercising this duty on a substantial scale.
One component of the reorganization is the downsizing of the government. Directors came forward with several cost-cutting plans. Layoffs are part of that plan. I decided against a 32-hour workweek. I do not want to punish employees across the board. That is not a solution to the structural imbalance. We have to reduce the size of government. We already started by laying off unclassified employees. Some time this week, we will begin the process of classified layoffs by sending written notices to all employees. Let me be clear: When you get this notice, please keep in mind this does not mean you are being laid off. This notice is merely part of the process. It is a general notice. Individual notices will be sent according to each agency's reorganization plans. Also bear in mind that agency heads will choose positions for layoffs, but it is the Department of Administration Human Resources Division that will decide who gets laid off based on seniority and performance evaluations.
The Department of Labor and AHRD are working on a displacement and re-engineering program. They are prepared to help displaced government employees transition into private sector jobs, business opportunities, or higher education at GCC and UOG. We want to do everything possible to assist families hurt by this downsizing. As much as possible, we want these people to have jobs, to stay out of welfare and to continue contributing to the economy.
Reduction of the size of the government is only one part of the reorganization. The greater part of this plan is to retool government so that its services make sense for you. Discussed on Saturday were investments into technology to replace entry-level work… energy savings, especially in public schools… the reduction of benefits… retirement contributions… performance reviews… mergers of agencies… outsourcing and public-private partnerships… creative revenue ideas… sharing of resources, and much, much more.
Our goal is to make government right… to make it work for you. After we get the bond and pay all the overdue tax refunds, we want to ensure government is in a position to never again withhold services and your tax refunds from you. We will do this by being fiscally responsible and by ensuring we set aside monies in order to pay your tax refunds. These are hard decisions we are making, but we mustn't spend another 61 years wondering whether we should make them. One day, this government and this island will belong to your children. If we don't act now, they will inherit an island very far from what we hope it can be today.
On a final note, one senator said recently that I'm just playing a game… That I won't really lay people off, I'm just trying to pressure senators to pass the bond. As far as I'm concerned, there's nothing fun about people having to beg for their tax refunds - their money - and government workers who are subject to a lay off because of politicians' irresponsibility. That bond is the only solution on the table to pay the tax refunds by December. It will only happen if senators pass the bond this month. I've come up with the solution… now it needs eight senatorial votes to pass it. On the other hand, I have an executive duty to reorganize the government and make it work. I'm not shirking from that duty. I'm doing it… and I'm not asking senators to share in the tough choices with me and take the heat and the criticism. I only ask that they make the right decision as well, and pass the bond that is now in their hands.