Calvo proposes bold borrowing intiatives in State of the Island addressWritten by Timothy Mchenry
Guam - In his seventh State of the Island Address, Gov. Eddie Calvo maintained his bold outlook on the future of the Island. Calvo introduced multiple initiatives to help solve some of the financial issues plaguing the Island. Calvo proposed a $100 million ‘modernization’ of the Guam Memorial Hospital. This capital investment, Calvo says, will need the approval of the legislature but will allow GMH to invest in infrastructure and equipment.
Additionally, Calvo proposed a plan to essentially open a line of credit with the bank to allow for the timely payment of tax refunds. According to Calvo, if the legislature authorizes the plan, Gov Guam will request proposals from banks to supply Gov Guam with $75 million every January. In exchange, the bank will receive a promise from Gov Guam to repay the $75 million in September of the same year—much like a credit card.
“The banks recognize that governments, just like any other organization, collect taxes and fees year-round. What the bank cares about is what the government can provide, and what the government needs is what the bank supplies: upfront cash,” says Calvo.
Calvo says this plan will allow for residents to receive their tax refunds faster.
“If you give me the authority to do this, senators, the procurement will take a little more than a month, and we can probably process all, ready payments within a couple weeks after selection,” says Calvo.
But this particular legislature is hard pressed to allow for more borrowing. Speaker B.J. Cruz tells PNC that he will reserve judgement on Calvo’s tax refund plan until he reads the full proposal. Senator Mike San Nicolas however tells PNC that the Governors math does not add up> San Nicolas says he does not and will not support any plans that involve more borrowing.
Meanwhile, Gov. Calvo also discussed increasing the liquid fuel tax by four cents. This measure would coincide with Speaker B.J. Cruz’s plan to borrow $50 million to fix Guam’s roads. Speaker Cruz says while he does not support raising taxes, he will entertain Calvo’s suggestion at the public hearing for his bill. Cruz says he plans to introduce his road repair bill on Tuesday.