27 Feb 2018
- Mar-Vic Cagurangan – For Variety
HAGÅTÑA — The government of Guam is bracing for possible furloughs, layoffs and a 32-hour work week as part of emergency measures to lessen the impact of revenue shortfall resulting from President Trump’s federal tax cuts.
The administration’s finance team projected the federal tax cuts would cause GovGuam to lose between $47.9 million and $67 million.
“My team continues to be available to senators and provide information they need. The dialogue continues and we are still hopeful that we’ll be able to stave off furloughs or a reduction in hours,” Gov. Eddie Calvo said.
Calvo has instructed the Department of Administration to evaluate the current operations and services and identify employees that would be deemed non-essential to meeting the core functions and mandates of each agency.
“Employees that fall under programs or services that are deemed non-essential must be identified and an adjusted staffing pattern must be prepared and reported to the Bureau of Budget and Management Research,” governor said.
The governor said results of the assessment would guide the administration through proper procedures should furloughs and layoffs are determined to be the most prudent option
The governor also ordered freeze-hiring for locally funded positions, and minimize overtime, to include public safety.
The “Tax Cuts and Jobs Act,” which Trump signed into law on Dec. 22, cuts corporate tax rates permanently and individual tax rates temporarily. It permanently removes the individual mandate, a key provision of the Affordable Care Act, which is likely to raise insurance premiums and significantly reduce the number of people with coverage.
Although local taxpayers don’t pay federal taxes, Guam mirrors the federal tax system.
The Calvo administration has proposed raising the business privilege tax from 4 percent to 6 percent to make up for the projected revenue loss. Senators, however, have not shown any willingness to pass a tax hike bill.
“The Guam Legislature have been discussing the possible consequences of the new federal tax law for a few months now,” a press release from the governor’s office said. “But after a series of meetings to include, Special Economic Service meetings, meetings with the fiscal team, special session and committee of the whole, and a meeting with the Governor and his fiscal team, Senators haven’t voted on a solution.”
Meanwhile, the Department of Administration has requested the bank and book balances of all bank accounts of all autonomous agencies and the two other branches of government.
The DOA’s order was in response to Sen. Frank Aguon’s proposal to tap “special funds,” including those the accounts of autonomous agencies.
The governor was quick to issue a disclaimer.
“This wasn’t something that my team had considered and we appreciate the senator sharing possible solutions as we work to address the impact of the federal tax policy together,” Calvo said. “With the letter sent to the other branches and to the autonomous agencies today, we ask that they submit the information and opine on the use of these funds.”
Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/102541-govguam-furloughs-loom