AILING GUAM GOVERNMENT SEEKS $200 MILLION LOAN

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HAGATNA, Guam (Pacific Daily News, Mar. 7) - Gov. Felix Camacho wants lawmakers to give him permission to borrow as much as $200 million on the bond market to pay for government operations.

Camacho also has asked for permission to borrow as much as $50 million in the short term, with the loan to be repaid when the bond money is received.

The government's General Fund has a deficit of $110 million left from last fiscal year, which is expected to grow by as much as $104 million this fiscal year.

Camacho late yesterday afternoon sent a bill to the legislative speaker's office, along with a letter explaining his plan.

"This bill will allow us to address many of the outstanding payments that this government owes to taxpayers and vendors," Camacho said in a written statement. "It is critical for us to get this money released and circulating in the economy immediately."

The governor has said that cost-cutting and revenue-generating measures taken by lawmakers recently will not be enough to save the government.

The governor's borrowing plan yesterday received a lukewarm response from both sides of the aisle at the Legislature.

Speaker Ben Pangelinan, D-Barrigada, opposes borrowing money for government operations and instead has proposed borrowing money only to spark economic activity, such as for capital improvement projects and income tax refunds.

"Borrowing for operating expenses does not maximize and stimulate any kind of economic activity and does not result in a permanent appreciation of government assets," Pangelinan said. "I'm going to have to think long and hard on this one."

Sen. Jesse Lujan, R-Tamuning, has proposed borrowing money only to pay for capital improvement projects that will receive matching funds from the federal government, such as water and power improvements, new roads and new schools.

"I don't like it," Lujan said of the governor's proposal. "It looks like we're going to take care of short-term obligations with long-term obligations, and that's not the way to go."

He said the governor's proposal appears to be business as usual.

"What I've been saying is we're getting one credit card to pay for the next," Lujan said. "We need to revitalize the private sector here, and we're not doing that with this."

According to the bond bill submitted by the governor, the bonds should expire no later than 2023, with an annual interest rate to bond holders of no more than 8 percent.

It also asks for permission to spend money to enhance the government's bond rating so it can pay less for the bonds.

March 7, 2003

Pacific Daily News: www.guampdn.com 

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