NEWS: Freedom & money on the line Thursday



By Johnnie Rosario

johnnie@kanditnews.com


(Tumon, Guam) One thing is certain to happen Thursday, and another matter hangs in the balance.


It is certain that, when the Guam Legislature goes into session tomorrow, senators will debate issues openly, freely, and without rehearsal for the first time in the modern history of the legislature.


The uncertainty that remains is how much freedom residents will have once the session has adjourned.


Gov. Lou Leon Guerrero has asked senators essentially to give her the power to arrest people who violate her unilateral executive orders. A bill by Speaker Tina Muna Barnes will criminalizes violations of executive orders issued under the public health emergency. Five other democrats have signed onto the measure in support of it.


Ms. Leon Guerrero wants to issue a curfew and to be able to throw people in jail, who visit other people's homes while her social isolation orders are in place. This ability to enforce her orders, according to her office, is precipitated by the climbing infection rate of the Coronavirus due to some residents not following her social isolation orders.


Among those residents are her own staff and security officers.


At stake, according to the doctors who are advising her, are the lives of 3,000 people in the next five months if the island is unable to contain the spread of the virus using means that many say are unconstitutional.


Sen. James Moylan, Sen. Louise Muna, and the chairman of the Republican Party of Guam, former Sen. Tony Ada, have protested outside the Guam Congress Building in an effort to raise opposition to any measure that would give the governor dictatorial powers. Mr. Moylan also is actively campaigning against Ms. Muna Barnes's bill on social media with a graphic opposing the criminalizing and hefty fining of violations.


While it is unclear whether there are enough votes to pass the speaker's bill, the majority of senators have signed off on different measures providing economic relief to Guam's families. These measure are expected to be debated on the session floor, beginning at 10 a.m. Thursday.


Federal cash relief

Among these are two bills having the greatest financial impact on the greatest number of families. The first is by Sen. Therese Terlaje (co-authored by Sens. Sabina Perez and Moylan), which would provide resources and set deadlines on the movement of federal cash assistance and unemployment money into qualified residents's bank accounts. The bill was introduced following a conference call last week with Congressman Michael San Nicolas on what needs to be done to avail of federal cash assistance quickly.


In a conference call Monday with Ms. Muna Barnes, Mr. Moylan, and Sen. Mary Torres, Mr. San Nicolas unveiled two financial plans to pay out federal direct cash assistance and unemployment checks sooner than the federal money is anticipated to reach Guam. The cash assistance financing plan had two options: one involving financing through the Government of Guam Retirement Fund, and the other involving financing through local banks.


The retirement fund responded that it would take at least two weeks to offload $142.8 million in investments in order to reinvest in a bond with the government that would be used to pay the direct cash assistance checks to 119,000 people at a high range of $1,200 each.


The Guam Banking Association responded that it didn't have the capacity to handle that kind of money and that volume of customers so quickly.


"At the end of the day even the best ideas need the drive and determination of all parties to make it happen," said Mr. San Nicolas. "We conceptualized and outlined workable strategies, and while we can contend with some of the assertions behind the objections our people need solutions not argumentation, so we yield and hope for the best," Mr. San Nicolas added. "We will always try to bring solutions to the table for our people as we conceptualize them, and will not be deterred by acceptance or rejection if we feel it is in the best interests of our people."


Local cash relief

The second bill is by Sen. Regine Biscoe Lee, which was introduced today. The measure would provide an additional $400 per tax filer and $800 per joint filer to the federal plan to give $1,200 per qualified tax filer. And it targets low- and middle-income wage earners.


The Recovery Income Support and Empowerment (RISE) Act of 2020 will allow the governor to transfer up to $15 million from any government account to pay for locally-funded financial assistance. This will include money that will be reimbursed to GovGuam for locally paid war claims

The Legislation can help up to 30,000 families. Eligibility will be limited to taxpayers reporting less than $40,000 in income for single filers and $80,000 for joint filers...and granting $400 to eligible single filers and $800 to eligible joint filers.


Ms. Lee's bill has nine co-sponsors, making it veto-proof: Ms. Muna Barnes, Ms. Perez, Ms. Terlaje, Vice Speaker Telena Nelson, and Sens. Joe San Agustin, Kelly Taitano, Amanda Shelton, Jose Terlaje, and Wil Castro.

What about tax refunds and government jobs?

The Leon Guerrero administration, even prior to the Coronavirus crisis, was struggling to pay tax refunds. As of today, the governor has yet to complete payments for Tax Year 2018 refunds and prior, with tens of millions of dollars in tax refunds waiting to the converted from error and suspended status to Status-A, ready-to-go payments.


Not a cent of tax refunds for Tax Year 2019 has been released, and it's nearly April 15. According to the current budget, that's $125 million in tax refunds that will need to be paid.


That's why Sen. Telo Taitague and Ms. Terlaje have introduced separate legislation to mandate the payout of tax refunds from funds they have identified as sources for those payments. But if senators pass Ms. Lee's bill, those funding sources will be depleted. So, how will the government have the money to pay tax refund filers what they are owed this fiscal year?


The problem is exacerbated by the fact that virtually no hotel occupancy tax, individual withholding, and business privilege taxes are being collected due to the halt in the economy.


Cash flow models from the prior administration show that, at a minimum, the government of Guam needs about $58 million each month just to meet gross payroll and take care of non-discretionary payment items.


Where will this money come from?

Ms. Leon Guerrero announced today that she has no plans to furlough government of Guam employees. She said that if need be, federal money meant for states and territories to supplant budgetary losses during the Coronavirus crisis will be used to sustain government payroll.


However, that federal money equals only $117 million, or the minimum payment for only two months of the government's spending needs at a time when hardly any other sources of income are being generated into the GovGuam Treasury AND while tax refunds still are due to people.


At the most, GovGuam will have the resources (thanks to Congress) to pay its necessary costs in April and May. If the economy is allowed to restart and it is safe enough for private sector workers to head back to work by the end of May, then the government will begin to collect income taxes in June, and business privilege taxes on June 20.


But if the economy does not pick up by the end of May, it is unclear exactly how the administration will pay for costs going in to July and the last quarter of the fiscal year.

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