COLA Challenge finally over
by Sabrina Salas Matanane, KUAM News
After four days of contentious debate, the COLA challenge has finally ended. And while the vote is now a done deal, we look at the cash and consequences of today's vote. After last Friday's peaceful protest at Adelup, Day 1 of session led to a complete miscalculation of the numbers. Day 2 found the $2 million quickly dwindled to only $704,000 for COLA.
Day 3 was another round of political hide-and-seek as the Camacho Administration finally came clean that $14 million cash would be available through the liquidation of Rural Telephone Bank stocks next May. Despite who knew what and when, the Camacho Administration produced a new and revised version of its COLA bill.
Here's the technical explanation: the Governor's bill proposes to tap the $11.9 million in GTA proceeds that's supposed to go to pay the Government of Guam Retirement Fund's unfunded liability for Guam Telephone Authority retirees. $7 million will go to pay COLA, while the remaining $4 million will go to pay unfunded liability. The diversion of funds is based on the promise that the Retirement Fund would be reimbursed next year when the liquidation of the RTB stock is completed.
Now here's the format in laymen's terms. The government is borrowing from one class of public sector retirees to pay the debt for another class of retirees. And here's the latest challenge: while $11.9 million was the initial estimate that was owed for the unfunded liability for GTA retirees, that's since changed. What's actually owed is $28 million.
And according to the Retirement Fund director Paula Blas, on the floor today she said such will have to come from current contributions coming into the Fund.
Vice-Speaker Joanne Brown (R) announced in session, "In doing one action we are not doing good for something else, and we're not doing something good for the rest of the GovGuam retirees because they're going to have to burden this responsibility and we're not immediately doing something good for retirees of the Guam Telephone Authority because we're not taking the money from the sale of GTA and putting it towards what we said it would. And certainly that was supposed to go toward paying the obligations that were owed so they in the future would be able to receive their retirement checks."
While the Retirement Fund's director, based on her legal counsel's opinion, testified before lawmakers that if Bill 1 were to pass the Fund it would not be in violation of any court orders or run into any problems down the line. Blas did provide the Fund's actual position. "I have to go on the record opposing Bill 1 only because as a matter of principal it's actually something that we should fight for, and that's the entire $11.9 million," said Blas. Senator Bob Klitzkie (R) interjected by asking if such was the official position of the Retirement Fund, which Blas confirmed that it was.
The final vote on Bill 1 3-S came down today just before lunch, garnering 12 votes for, 2 against, and a single excused absence. The two lawmakers who voted against the measure were Democrat Minority Leader Judi Won Pat who initially recused herself but later had to vote, and Senator Klitzkie.
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