Guam enters FY2021 leaning on federal dollars

Today marks the start of Fiscal Year 2021 for the Government of Guam. It will be the first full year under the COVID pandemic, and money is expected to be very tight. Department of Administration Director Edward Birn said they will have to be careful with the cash flow.

"As everybody expects, 2021 is going to be difficult in many respects because we’re not expecting an immediate return, even if everything were opened up tomorrow, we’re not expecting immediate return of tourists, and the economy is highly dependent on tourists," he said. "So, I’m sure we’re going to be careful how we measure out our cash."

Without much of a tourism industry, the consensus is Guam will have to rely very heavily on continued help from Washington, D.C.

"Certainly hope that we can have a continued access to federal assistance, and particularly in the health care area," Birn said. "We want obviously the Medicaid match to be maximized and we want to make sure that the community centers are fully funded so all this money we certainly hope comes in."

In a press conference yesterday, Congressman Michael San Nicolas provided the latest details on federal assistance. The coronavirus relief bill offered by house democrats, he says includes a $1.17-billion  allocation for GovGuam operations. 

"The budget of the Government of Guam came up to $958-million dollars, so this $1.17 billion can fully replace and add extra to the Government of Guam budget," San Nicolas said. 

So, he suggests, GovGuam could then give a full tax holiday to local businesses by reducing the 5-percent BPT to zero.

"On top of that we can create income tax rebates particularly if those rebates are going to go to individuals that can demonstrate they’ve had negative economic impact," San Nicolas said. "We just got to build out the criteria. This is where the Government of Guam is going to have to really have to do a lot of legwork. It’s just part of the process and sign of the times."

In total Guam could be in line for up to $3 billion in federal help he says. But the house still has to pass the bill, and it must then also clear the Senate, then the white house.