Wednesday, October 28, 2015
Pay Raise Politics
Pay Raises Having an Impact
Guam Daily Post
Just about 11 months ago, Guam’s elected leaders, in a short-sighted move that served only their own interests, gave themselves pay raises that not only were unjustifiably large, but – incredibly – were retroactive to 10 months prior to their enactment. Last week, the governor’s office informed the Guam Legislature that $1.57 million legislators had planned to appropriate for, among other things, overdue payments to Guam Department of Education vendors, pay owed to government employees who were required to work additional hours as Typhoons Halong and Dolphin passed the island, and repairs to government facilities in villages.
These expenditures are obligations the government has; they will have to be paid eventually. But, apparently the government just does not have the cash.
Gov. Eddie Calvo told lawmakers that he used the money to pay income tax refunds. As we have opined, the timely payment of income tax refunds is an unqualified obligation of the government – even if the federal court had not enforced that obligation with an order setting a six-month deadline for the payment of those refunds (which it has and which the administration has continued to contest in higher court).
The money for tax refunds is money that does not belong to the government any more than the $8.21 in change from a $20 bill that was used to pay for an $11.79 sack of rice belongs to the grocery store.
It is to the administration’s credit that it has refinanced bonds in the current low-interest markets and saved money it would otherwise be required to spend on debt service. The income-tax refunds are popular, especially in light of previous administrations’ failure to pay them for years, and, in fairness, the Calvo administration began to pay them prior to the court order.
But, the tax refund money is simply not the government’s to spend; it is more accurate to say that the $1.57 million in bond savings was spent elsewhere – on the hefty, retroactive pay raises introduced, passed and signed into law on Nov. 21, 2014 (three weeks after the election), for example.
We are reminded that following the enactment of the raises – which, in addition to being retroactive, made the members of the Guam Legislature the second highest paid state or territorial lawmakers in the United States - Sen. Michael San Nicolas led the move to roll back the raises. In the end, however, he was joined by only four other legislators – Sens. Nerissa Underwood, Frank Aguon and Tom Ada, and Vice Speaker Benjamin Cruz.
We encourage government fiscal responsibility at a higher level than that shown by the enactment of the Nov. 21, 2014 pay increases. The impact of acting without such restraint is shown as the government struggles to pay its bills.
Legsilature to get $8.4 million
by Shawn Raymundo
The Fiscal 2016 Budget act is just days away from going into effect and when it does so on Oct. 1, the Legislature’s central office will get an appropriation of $8.4 million, an increase of about $1 million compared to its budget in the fiscal years 2013 and 2014.
The upcoming appropriation is an 8.1 percent increase from the roughly $7.8 million the branch initially received at the start of the current fiscal year.
However, after lawmakers last November passed a controversial bill to raise their salaries by nearly 40 percent, the Legislature’s budget jumped to nearly $8.5 million.
The pay-raise measure, enacted as Public Law 32-208, also raised the salaries of the attorney general, governor, lieutenant governor and Cabinet appointees. The raises were pursuant to last year’s government-wide income adjustment called the Competitive Wage Act of 2014.
The law also allowed the officials to receive a retroactive payment dating back to January 2014, which was when the Department of Administration submitted the Wage Act to the Legislature for implementation.
Vice Speaker Benjamin Cruz, who recently headed the legislative deliberations to the upcoming budget, said the $726,000 appropriation in November accounted for both the raises and retro pay.
“The governor was given authorization to provide whatever amounts of money was necessary to provide the agencies to cover the cost of the salary increases,” Cruz said.
The authorization was a one-line sentence in PL 208, which allowed Gov. Eddie Calvo to appropriate any fiscal 2015 money to the agencies to account for the raises.
“The appropriations from FY 2015 are hereby authorized for the payment of salaries of the positions identified in this section,” the law states.
Prior to the November raises, Speaker Judith Won Pat was making nearly $68,000 a year, while each of the remaining senators took home close to $61,000 annually. Each member of the legislative body currently makes $85,000, meaning the Legislature is paying about $360,000 more in salary expenses.
Accounting for the senator’s government benefits, the Legislature needs about $1.58 million a year — roughly $422,000, or 37 percent, more than before the raises — to pay for salaries and benefits.
Cruz says the upcoming budget appropriation to the Legislature will cover all operations including the increased salaries and benefits for the elected officials.
Pacific Daily News reached out to the Legislature’s executive director for comment on the increased budget appropriations but as of press time, he was unavailable to provide a response.
Since the enactment of raises, certain lawmakers and the governor have come under fire from several citizens who took issue with the way in which the law was introduced and passed without going through a public hearing.
Andri Baynum, chairman to the local group Guamanians for Fair Government, has previously stated that the law was enacted in a “shady manner.”
In early 2014, lawmakers passed a bill that prevented elected and appointed officials from receiving raises through the Wage Act, but less than a month after the General Election, acting Gov. Ray Tenorio sent the controversial measure down to the Legislature.
He then called senators into a special session, urging them to pass the bill. Lawmakers deliberated the measure for two hours before passing it in a 10-1 vote.
Former Sen. Mike Limtiaco was the only lawmaker who opposed the bill while Sens. Tom Ada, Dennis Rodriguez Jr. and Mike San Nicolas were absent.
San Nicolas unsuccessfully tried to repeal the law two times — once at the end of last term and another at the start of the current term.
Despite voting in favor of the Wage Act bill last November, substantial criticism from the public prompted Sen. Frank Aguon Jr., D-Yona, to introduce legislation aimed at repealing the raises for lawmakers. The bill was voted down on the final day of the 32nd Legislature in January.
During the November special session, senators agreed to waive the required public hearing on the bill. Guam law states public hearings can be waived only in the event of danger to public health or safety, or if the bill is identical to a bill that already had a public hearing.
In waiving the public hearing, lawmakers cited previous public hearings, held earlier last year, when they deliberated the implementation of the Wage Act salaries for government employees.
Guamanians for Fair Government have led a campaign against Sens. Anthony Ada, Brant McCreadie, Tommy Morrison, Tina Muña Barnes, Rory Respicio, Dennis Rodriguez Jr. and Speaker Judith Won Pat for supporting the raises.
“We’re moving towards 2016,” Baynum said. This “is when the people are going to be able to decide if they want to have these types of leaders continue to stay in office and undermine a democracy and undermine the importance of public hearings and the importance of people getting involved.”
The group launched a petition on Change.org for citizens who support a repeal of the law to sign. According to the site, the group has garnered close to 1,800 signatures.
Baynum said that in the past few months, members of the group have gone out to the public to get physical signatures and have actually reached about 2,600 supporters.
Members of the group, he said, will be at the Dededo Flea Market over the weekend to get more signatures. He added that they’re also planning to hold fundraisers soon.