by Ken Quintanilla

Guam - In the midst of the budget session on going at the Guam Legislature, Governor Eddie Calvo today officially submitted the Omnibus Fiscal Reform Act of 2012, which if enacted could the government save over $70 million in spending. Nearly a month ago Calvo cleared his Spending Cuts Task Force's list of recommendations on how to cut $43 million annually. And today the bill containing all legislative authority actually make those cuts and implement the program was finally submitted to lawmakers.

"If the legislature passes it, it would give the governor the authority to reduce the GovGuam workforce through voluntarily separation of the early retirement program, to make annual savings by re-amortizing the yearly amounts of the contribution rate to the Retirement Fund and it will also cut payroll benefit retirements so there will be even more savings," said Troy Torres, the governor's communications director. He stressed that the important thing about making these spending cuts is for every dollar that's not spent on operations, it's a dollar to go pay the debt to pay for tax refunds, noting, "Not just a debt that remains for 2011 refunds but come January of next year, we're going to owing tax payers more for refunds when they start filing another estimated $100 million."

In a letter to Speaker Judi Won Pat, Calvo notes that the initial $43 million in cuts was critical in order to keep his administration's promise to the people of Guam to prioritize the payment of their tax refunds and the operational viability of classroom, medical and safety services. He however notes that the spending cuts task force instead delivered a proposal that at its high end could realize over $70 million savings.

As we reported last month, the recommendations included an early retirement program estimated to cut $15 to $35 million in annual spending, extension of the amortization period to pay down the unfunded liability by 10 years with $28.1 million in cuts, reduction in holiday pay cutting over $4 million, nearly $3 million in cuts through the elimination of Guam Fire Department non-productive pay plus reduction of GFD overtime to six hours, elimination of GFD incentive pay, elimination of annual leave cash out, reduction of paternity leave to industry standards and a cap on leave sharing to 480 hours per occasion, limit to medical reasons.

Torres says the Calvo Administration hopes the bill will be addressed in order to be enacted for this fiscal year, saying, "We hope the Legislature will act on it swiftly whether as a separate measure and I would think they would have to have a public hearing and five day notice then the legislature can be called into session."

Just yesterday when the Guam Legislature submitted its own substituted version of the Fiscal Year 2013 budget in which $100 million would go automatically be set aside to go toward 2012 income tax refunds while the Executive, Legislative and Judicial Branches of the Government of Guam would require operations be reduced by a combined $14 million in which the savings would go to pay past due tax refunds.

In a release, Calvo says while the legislature is on the right track by recognizing the need to cut operational spending and mandating a cut, it's just not enough adding, "That cut needs to be backed up by the reduction of the GovGuam workforce and the elimination of certain payroll entitlements. And we need to cut spending even more through attrition, early retirement and the reduction of payroll benefit entitlements."

He further added that the spending cuts bill needs to pass because current budget proposal lacks a fiscal plan to pay down our debt and put money away for future tax refunds.