Tuesday, 16 May 2017

Budget talks heat up over section 30 projections for War Claims

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Senator Michael San Nicolas grilled BBMR over their "optimism" in section 30 projections, focusing on how Guam War Claims will be paid out.

Guam - As the weeks go by with little to no progress on finding an alternative source of funding for paying out Guam War Claims, lawmakers are becoming more anxious about next year’s budget and provisions for complicated issues like tax refunds.

Even Congresswoman Madeleine Bordallo acknowledges that in the worst case scenario—which is becoming more and more likely—war claims will have to be paid out of section 30 money after all.

At today's budget hearing on the General Fund, some intense back and forth between Senator Michael San Nicolas and Bureau of Budget and Management Research Acting Director Lester Carlson over section 30 money was heard.

"Shouldn’t we base our projections on what has already happened and not on what hasn’t happened? And since it’s already existing law that it’s $68 million, shouldn’t we basing our section 30 projection on that figure?" questioned San Nicolas, who has been vocal opponent of Adelup's fiscal projections.

"I would again submit that we should ... collaborate with trying to get a resolution to an alternate funding source for section 30, I think we agree on that," answered Carlson.

At the center of the discussion was the anticipated amount of section 30 funds Guam would be receiving at the end of the fiscal year and at what point does that amount cap to pay for the Guam Loyalty Recognition Act or War Claims.

Initially, Adelup contended that the amount capped at $120 million, which means that any amount Guam receives after the first $120 million in section 30 will automatically go to an account to pay Guam War Survivors. But the Office of Insular Affairs later clarified that section 30 monies for Guam actually cap at $68 million. Adelup is anticipating that the Treasury will pay out $78 million in section 30. 

"I think we’re not saying the same thing. What I’m saying is if we’re gonna base it on actuals, we should always base it on actuals ... and not what we hope Madeleine [Bordallo] can accomplish by getting some kind of concession," noted San Nicolas. "So if we’re gonna budget actual to actual then we really should use a lower section 30 figure and if we’re going to do that how do we go about then reconciling a $68 million figure versus a $78 million figure?"

"I don’t believe the issue is dead and that we should just concede to the $68 [million] just because it’s written in the law that we actually thought up until the days leading into special session and during special session that the threshold was $120 million," replied Carlson.

To that, Senator San Nicolas suggested Adelup take that $10 million out of their executive budget in the event they’re wrong about that contentious $10 million. But Carlson countered that it’s too early at this point to rush to such prospect and he lamented that discussions like that should not be had at least until August when it becomes clearer where the $10 million would actually come from.

The governor’s office is seeking a general fund budget of $722 million for FY 18 which is a $41 million increase from the current fiscal year.

 

 

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