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GovGuam shortfall could reach $20 million

By Dionesis Tamondong

HAGÅTÑA, Guam (Pacific Daily News, April 8, 2009) - Government-wide furloughs this fiscal year are unavoidable, according to the government of Guam’s budget director.

How much agency budgets are cut and employee work hours reduced depend on when the furloughs are implemented, Bureau of Budget and Management Research Director Bertha Duenas said yesterday.

"It’s going to be unavoidable, it’s just a matter of when," Duenas said of the furloughs. "The longer we take to implement it, then the more condensed (the furlough) is in the remaining months of this fiscal year."

When the federal court in February ordered GovGuam to begin paying nearly US$1 million each week for court-ordered landfill projects, GovGuam officials said they would have to cut nearly 6 percent from each agency’s budget to afford those payments.

Since March, GovGuam has paid more than US$5.9 million from its General Fund to comply with the court order. The impact has included further delays in paying tax refunds, vendors and services for medically indigent patients, GovGuam officials have said.

Last week, Governor Felix Camacho said the decision to implement the furloughs would depend on whether District Court of Guam Chief Judge Frances Tydingco-Gatewood suspends her order for the weekly payments.

The judge yesterday temporarily denied GovGuam’s request. She said she will decide on the matter after a hearing later this week. Her decision will depend on how viable GovGuam’s landfill financing plan is.

GovGuam’s attorney general and bond counsel yesterday submitted affidavits certifying that the government’s bond-borrowing plan is feasible. The U.S. Attorney’s Office and the federal receiver, which oversees the landfill projects, will submit their assessments of GovGuam’s plan this week.

GovGuam as of yesterday hasn’t issued any furlough notices. A 90-day notice for employees is required by law.

Duenas said the administration may ask the Legislature to pass a law to shorten the notice requirement, which is what happened in 2003 when GovGuam last implemented furloughs.

If furloughs are implemented in 30 days, it would mean a 13-percent cut in the remaining five-month allotment for each agency’s budget this fiscal year. That comes out to about 11 work hours cut from each employee per pay period, Duenas said.

If furloughs start in 90 days, agencies would see a 22-percent cut in their remaining three-month allotment. That comes out to about 17 work hours cut from each employee per pay period, Duenas said.

The planned furloughs come at a time when the government is collecting 3 percent below its projected revenue collections as of February, Duenas said.

"If that trend continues, then we have the potential of a shortfall of up to US$12 million for the rest of the fiscal year," she said.

Coupled with the weekly US$1 million payments, GovGuam’s shortfall could reach US$20 million, she added.

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