Senators and Administration officials today held the first Special Economic Service meeting ahead of the Fiscal Year 2023 budget process.

The governor’s fiscal team had an update on the current financial picture. Budget Director Lester Carlson says general fund revenues are tracking $61 million higher than projected, but going forward it will be increased construction activity, mostly military buildup projects, that will drive and maintain the economy.

"And you’ll note in some of the reports, the CRER, the construction sector you’ll see that as Mr. Hiles mentioned that construction is booming, phenomenal and all those other nice words right,” he said. “But it bears out in the actual line item for that particular category of work. The comfort that I have is knowing that the base is thereby the continuation of the revenues that we believe we can sustain.”

But Public Auditor BJ Cruz says when the military projects are quoted in the billions of dollars, most of that money does not come to Guam, it goes to vendors and contractors stateside. He says Guam could cash in more by taxing the construction upfront.

“They’re not paying anything, they’re keeping a lot and paying everyone in Maryland and wherever and I keep insisting we can actually straight off the top five percent should be given for the privilege of doing business on Guam,” Cruz said. “But for the fact that Guam existed and this system is going into Guam you would not get the contract for $1.9 billion to build this system.”

GVB also said tourism, Guam’s other main economic driver continue to show improvement, but it will be more of a slower U-shaped rebound than a V-shaped one. The administration has already submitted its FY23 Executive budget request of $998 million, with $695 million available for appropriation. Senators are expected to begin agency-by-agency budget hearings starting next month. They have until the end of August to pass a spending plan to submit to the governor.