GUAM SHOULDN’T BORROW TO PAY DEBT

Editorial

GUAM SHOULDN’T BORROW TO PAY DEBT

Pacific Daily News

HAGÅTÑA, Guam (Jan. 25) - Some employees of the Department of Education who are eligible for retirement are being forced to postpone their retirement plans. And, until the education department pays off about $17 million in debt to the Government of Guam Retirement Fund, they will be forced to continue to wait.

During fiscal 2003, the education department - for reasons that still haven't been adequately explained - chose not to pay its employees' retirement contributions. Although the agency is up do date for fiscal 2004 and so far for fiscal 2005, a Retirement Fund board policy prevents DOE employees from retiring until the debt is cleared up.

The question is, how should the debt be repaid? What is the most sensible and financially sound way to fix this problem?

According to governor's spokeswoman Erica Perez, Gov. Felix Camacho's solution is to borrow money on the bond market - to the tune of more than $400 million - and use it to pay the education department's $17 million Retirement Fund debt, as well as $16 million owed to the Retirement Fund by Guam Memorial Hospital, among other expenditures.

Basically, Camacho wants to put the government of Guam -- and thus the island's taxpayers -- into even deeper debt over the failure of government agencies to pay retirement fund contributions as required by law. According to Public Auditor Doris Flores Brooks, GovGuam's deficit already is more than $300 million. This doesn't include millions of dollars in unpaid tax refunds and pending earned income tax credit payments.

It's just wrong to further increase the debt burden already on the shoulders of our future generations when the ability to cut the current size of government also exists.

This is the opportunity for the governor to demonstrate practical application of prioritization. He must look at the government of Guam's budget. He must choose items that aren't essential, streamline and make the cuts, as unpopular as those cuts may be. And he can always ask the Guam Legislature for help. They seem to have about $1.3 million they didn't use from last fiscal year.

January 26, 2005

Pacific Daily News: www.guampdn.com

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