Calvo signs bond, calls it "momentous legislation"

by Ken Quintanilla

Guam - Backed by members of the both the Democrat and Republican parties, Governor Eddie Calvo signed the bond bill into law before noon today bringing some relief to residents owed tax refunds and cost of living allowance payments. 

Before senators from both sides of the aisle, Governor Calvo signed the bond bill (Substitute Bill 1-3-S) into law, bringing some relief to those waiting on owed tax refunds and COLA payments. The substitute bill authorized borrowing up to $343 million in one or more series of bonds at an interest rate of no more than 6.5 percent and at a debt ceiling of 90 percent of our borrowing capacity. The bill is now Public Law 31-76.  

After a grueling battle between the Administration and the 31st Guam Legislature, Governor Calvo says he is ultimately appreciative to the senators for working on bipartisan legislation that will ultimately help the people of Guam. "I'm so thankful in working with them in passing what I believe is momentous legislation that can finally put behind us the issues in regards to those amounts owed to taxpayers as well as the COLA recipients," he expressed.

The bill allows up to $198 million to go toward the payment of unpaid income tax refunds, plus interest for 2010 and prior tax refunds; up to $20 million for the payment of COLA, up to $26.4 million for payments owed to the Government of Guam Retirement Fund and if no alternate source of funding is available for the payment of health insurance premiums for Fiscal Year 2012.

However, Calvo says he will call senators into special session tomorrow to address a technical issue that if not amended would mean $40 million less for tax refunds. He explained, "We had talked to our bond counsel and there was one provision, for whatever reason, was taken out of the bill that we had proposed. With the taking out of this particular provision, it lowered the amount that we could borrow from $240 million to $200 million and we believe that it is so important that we're able to move forward to get the full borrowing authority."

In addition to the governor's amendment, some concern was raised regarding an amendment in Substitute Bill 1-3-S by Senator Judi Guthertz recommending the University of Guam be given the right of first refusal to conduct an independent analysis for the bond. Guthertz says she recommended UOG due to its past experience in conducting independent research that is unbiased and that frankly, they could use the money. Since the bond bill was signed into law, UOG has 10 days to decide if they can and will do it.

Said Guthertz, "And if for some reason, they cannot do it then GEDA would have to go out on a RFP and hire someone who has the qualifications and independence to do it." Guthertz is optimistic that the institution can conduct the analysis and has spoken to UOG president Dr. Robert Underwood.

However, according to the president, he hasn't been formally asked by the governor but in anticipation of it is looking at various options and putting a team together of both current and former employees, but wouldn't confirm or deny if UOG can or will do the analysis. Although possible provisions are in place, governor's chief fiscal policy advisor Bernie Artero says if it has to go up for an RFP, it may have an impact on the timeline of getting the tax refunds she's just not sure of the extent.

All of the six Republicans along with Democrat senators Guthertz and Tina Muna Barnes showed their support for the governor today and stressed the importance of finally signing this bill into law. With a total of eight senators present today, senators foreshadowed that the eight votes needed to pass any of the amendments needed was most likely.

Meanwhile, Tuesday morning Governor Calvo will take action on the budget bill for GovGuam.