GUAM LAWMAKER URGES ACTION ON $481 GOVERNMENT DEBT

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By Mar-Vic Cagurangan

SAIPAN, CNMI (Mariana Variety, Dec. 27) - Outgoing Senator Benjamin Cruz, D-Piti, yesterday made a last-ditch effort to have the 28th Legislature address the government of Guam’s revenue crisis, which he said has raised the public deficit to US$481 million.

"For the last several months, I have tried to be diligent in monitoring and determining the financial state of the government of Guam," Cruz stated in a letter to his colleagues, asking that the fiscal issues be put on the session agenda.

The lame duck Legislature is holding its last session before it adjourns this week. The 29th Legislature convenes on Jan. 1.

"Although less than a week remains in the term of the 28th Legislature, I am compelled to renew my request to address this situation and its potential impact on the fiscal year 2007 budget," Cruz told his colleagues.

Cruz, who lost his bid for lieutenant governor as former Governor Carl Gutierrez’s running mate, will not be around in the 29th Legislature.

"I’ve paid special attention to the actual amount of revenue we received for fiscal year 2006 as compared to the revenues initially adopted," said Cruz, who has been opposing the Republicans’ 2007 budget measure, which places the revenue projection level at US$457 million.

Attached to his letter are compiled financial documents that Cruz obtained from the Department of Administration.

Cruz earlier introduced Bill 377, proposing that the fiscal year 2007 budget be slashed by US$40 million, insisting that the current level is likely to result in deficit spending.

Cruz’s bill, which sought a budget cut from US$457 million to US$416 million, was never scheduled for a public hearing.

Cruz yesterday presented to his colleagues his comparative analysis of the figures reflected in DOA’s Statement of Revenues, Expenditures and Changes in Fund Balance dated Sept. 30, 2006.

Cruz said US$481 million is the correct "ending fund balance," or the total amount of deficit, which he said DOA omitted from its report.

"The sum of these two amounts," Cruz said, "is the highest deficit ever for the government of Guam."

The 2006 cumulative deficit indicated a huge leap from the US$361.9-million deficit level in fiscal year 2005.

Between August and October 2006, GovGuam has collected US$36.2 million in actual revenues, and is facing a balance of a little over US$5 million.

"With only the month of September remaining to be counted and over US$5 million needing to be collected to meet the revenue projection, the financial statements indicate that a windfall of over US$10 million, (or 10 times the amount previously collected in each of the three months prior to September) was collected in a single month," Cruz noted.

"This is curious as most other revenue categories do not have such an unexpected cash windfall. The administration must explain these figures," he added.

Unless the current Legislature moves to avert the deficit growth, Cruz said, basic services will be jeopardized.

Capping his letter, Cruz said: "Rather than addressing the balance of bills on the session agenda, most of which can be addressed by the next Legislature, I propose that our remaining time in the Legislature, including this weekend, be spent in committee of the whole with the administration to examine these figures and determine a plan of action to address this crisis."

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