“I have great concern about GRT, not only from revenue raising perspective, but also from the perspective of what has it done to the economy. Looks to me it had a retardant effect on the economy,” said Klitzkie.
FY2004 budget talks continue with projected revenues
by Ken Wetmore, KUAM News
Today the Legislature got down to the serious business of working on the Fiscal Year 2004 budget. Today senators spent the majority of the day discussing projected revenues.
Bill 94 estimates there will be over $139 million in income tax, $188 million in Gross Receipts Tax collection, nearly $54 million from federal sources, just under $5 million in GovGuam charges and fees and $26 million in outstanding receivables. The bill subtracts $16 million from income taxes due to the Bush tax initiative. That comes to a grand total of just over $396 million.
On the expenditure side, Bill 92 would spend $417 million during Fiscal Year '04, equating to a $21 million deficit. Here's where some of the money is being spent: the Department of Education, the University of Guam and Guam Community College would receive $177.6 million. The Guam police and fire departments and the Department of Corrections would receive $47.7 million.
Health and Human Services would receive almost $46 million. That equals out to around $271 million of the $417 million budget being spent on what the Legislature deems as critical agencies. The remaining funds are spread out between the other agencies, the Judiciary Branch and the Legislative Branch.
The budget bill would take center stage today and all day during session. Lawmakers reconvened at 9 this morning and would start to discuss section by section of the legislation.
Discussions would begin with lawmakers convening in the Committee of the Whole. At the opening of the discussions, Republican Senator Mark Forbes would ask Camacho Administration's financial adviser Bertha Duenas whether she, along with representatives from the Bureau of Budget Management and Research and the Department of Revenue and Taxation were there in a show of support of the revisions of the budget bill.
Duenas responded by saying they were there at the invitation of chair of the Committee on Appropriations and Budgeting, Senator Frank Aguon, Jr. to take part in the deliberations and that they were there for that purpose only.
Senator Forbes would then ask Duenas whether they were taking a position on Bill 92. Duenas responded by saying “not at this point”. Senator Lou Leon Guerrero meanwhile would thank Senator Aguon's staff for their hard work on Bill 92 and “providing the complete information”.
As we reported the Governor's budget submission back in April contained his framework for reorganization creating 12 cabinet departments with lump-sum appropriations. The budget was based on a revenue projection of more than $400 million. While nearly three weeks ago the Administration presented to the Legislature a revised revenue projection of $396 million, they did not take the time to submit a revised budget based on the new revised revenue projection.
As discussions would progress, lawmakers would begin to question the accuracy of the revenue projections specific to the ‘04 projection in Gross Receipts Tax collections, which the Administration estimates it to be $188 million.
Republican Senator Larry Kasperbauer said he was uncomfortable with the figure, expressing his concerns as the $188 million GRT projection is a 50% increase from last year's figures.
Republican Senator Bob Klitzkie also grilled BBMR acting director Carlos Bordallo, asking him to explain the Administration’s methodology in deriving the ‘04 GRT projection of $188M. “I have great concern about GRT, not only from revenue raising perspective, but also from the perspective of what has it done to the economy. Looks to me it had a retardant effect on the economy,” said Klitzkie.
Lawmakers are going section-by-section of the budget bill in hopes of coming up with a balanced budget for the next fiscal year, and are at this point sticking with the Administration’s ‘04 revenue projection of $396 million. The projection is inclusive of the increase of the GRT from 4% to 6%.
Even though Duenas told lawmakers today that she would not present a position on the revised budget bill, she did provide comment to KUAM News on what she thought about Bill 92. Duenas says while she's only been able to give Bill 92 a cursory going over two items stick out as problems. The first is the deficit, in excess of $20 million. The Governor's chief number-cruncher says she hopes lawmakers won't pass an unbalanced budget and will work to cut out the deficit.
The second problem, according to Duenas, is that while the legislature has given some flexibility in transferring funds, the Legislature has taken out some of the flexibility provided in the Governor's budget proposal. “The Governor's going to need as much flexibility as possible so we can direct or redirect resources as we envision reorganization,” she says.
As we reported, Vice Speaker Aguon told KUAM News in the Governor's version of the budget bill he was requesting carte blanche transfer authority. It was a provision Aguon said would be changed in the Legislature's version. Meanwhile, Duenas says the reorganization process could encounter challenges if the Governor isn't given flexibility. In the meantime, Governor's spokesperson Shawn Gumataotao says the Governor's Office will have a more detailed reaction to the budget after they've had time to thoroughly analyze it. He says that reaction should be available in the next couple of days.
More Articles in August