HAGATNA, Guam (Pacific Daily News, Feb. 13) - The government of Guam needs $1.5 million a day to operate but cash collections have declined to about $700,000 a day, Gov. Felix Camacho told the Guam Chamber of Commerce yesterday.

With GovGuam's day-to-day cash shortages, the governor warned that payless paydays are ''just around the corner'' for the island's government.

Members of the chamber are interested in the governor's financial plan, which includes proposals to raise or introduce new taxes and fees to help save GovGuam from financial collapse.

But the governor, although cordially received by the business organization, heard a clear message: The chamber is opposed to any new or increased taxes.

Steve Rudder, chamber vice chairman, read a statement saying the organization includes 318 companies with 30,000 employees, representing 70 percent of Guam's Gross Island Product - the value of all products and services produced on island.

Any new or increased taxes would exacerbate the decline in private-sector jobs, according to the chamber's statement.

There were 39,070 employees in the private sector in September last year, 5,010 fewer than in September 2000, according to the Guam Department of Labor. During the period in which private-sector jobs decreased by the thousands, GovGuam had 12,620 people on payroll, up slightly from 12,530 two years before.

Camacho has proposed reducing 542 jobs, or about 4 percent of GovGuam's work force, but not until after this fiscal year ends in September.

Some Guam chamber members who felt the government is reluctant to implement deep cost reductions urged the Camacho administration to rethink.

In the business community, said chamber board member Monty McDowell, employees were let go as soon as cash was no longer available to pay them.

''Our employees went out the door and that was that,'' he said.

Chamber board member Carl Peterson said raising taxes will not help the island's economy.

A dollar taken out of the economy means a dollar less in opportunities to produce taxes, he said.

Chamber members also said the Camacho administration's proposal to implement only $7.7 million in cost reductions while it plans to squeeze more money out of consumers and taxpayers -- in the form of additional taxes and fees -- is the opposite of good financial sense.

GovGuam is $172 million short of the estimated $512 million it needs to operate the local government this fiscal year.

Before taking more taxes and fees from island residents, GovGuam must further reduce its expenses, chamber members suggested at a question-and-answer session with Camacho.

Camacho acknowledged that 90 cents of every tax dollar collected goes toward GovGuam's personnel costs.

The governor said some people are saying his proposed cost reductions are not enough but added that further cuts must be made over time.

''We have to do it gradually,'' he said.

Camacho's budget director, Paul Leon Guerrero, also said at the chamber meeting that GovGuam is planning to borrow about $200 million to cover past overspending and the ongoing cash shortfall.

February 13, 2003

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