Democrats fail Guamanians in new budget

(CORRECTION: The original version of this editorial stated the minimum wage in Guam is $8.25, which is incorrect. I also wrote that the last time the minimum wage was increased was in 2014, which also is incorrect. The minimum wage in Guam is $9.25 an hour, and it was Democrat Senator Joe San Agustin who introduced that legislation and Democrat Governor Lou Leon Guerrero who signed it into law in 2019.)

Guam’s voters have elected Democrat majorities to the legislature every two years since 2010, with the last six years of Democrat majorities aligned with a Democrat in Adelup. Yet, one of the historically signature policy goals of Democrats – raising the minimum wage – has failed yet again to be part of the annual budget deal.

Several months ago Kandit published a series of editorials regarding what data suggests has been an exodus of thousands of former residents. Comments on those editorials from former residents show the primary driver of their decisions to move stateside was Guam’s low wages compared with places like California and Nevada that have minimum wage of $16 and $12 per hour, respectively.

The last time the island’s minimum wage increased was in 2021, two years after Governor Lou Leon Guerrero signed into law legislation to increase the wage floor from $8.25 an hour to $9.25 an hour. That was five years, a pandemic, and an inflationary nightmare ago. $9.25 won’t even get you two gallons of gas. A household breadwinner working full time at the minimum wage can spend an entire paycheck on the average cost of a power bill. And there’s no way a minimum wage earner can afford today’s market rent prices in Guam.

On August 30, a razor-thin bipartisan majority of legislators approved a $1.3 billion budget for Fiscal Year 2025, nearly $100 million more than the current fiscal year. Budget officials also estimate there is a $27 million surplus from this year’s budget. (Fiscal Year 2024 ends September 30, and the new fiscal year begins October 1, 2024)

Despite GovGuam’s growing fortunes since the pandemic – with senators and Ms. Leon Guerrero committing much of that growth to major salary increases in GovGuam – spending plan after spending plan the past six years of Democratic control of the government continues to ignore the economic disadvantage the working poor in the private sector face.

Despite campaign promises, both Democrats and Republicans have failed to return the business privilege tax – a regressive tax that affects the poor and the middle class most – to its historic level of 4 percent of gross receipts. Ms. Leon Guerrero did champion a BPT tax cut on small businesses, but the larger corporations that account for the majority of private sector jobs pay the higher 5 percent BPT that began at the behest of Mr. Calvo at the end of his tenure.

Senators had an opportunity in formulating the upcoming fiscal year’s budget to reduce the tax burden on the poor and the middle class, allow companies to keep significantly more of their monthly revenue, and then force allocate those “savings” into higher private sector wages by raising the minimum wage.

And they failed. Again.

Democrat Senator Will Parkinson is among the exceptions. Twice he has attempted to convince his colleagues to support standalone legislation and most recently a rider to the budget bill that would cut the BPT in tandem with and conditioned by an increase in the minimum wage.

“I would support the notion of a BPT reduction for a significant increase in minimum wage,” Mr. Parkinson told Kandit.

Instead, senators sent Ms. Leon Guerrero a bill that once again prioritizes wages for public sector workers while ignoring the tax burden and the significant wage disparity between public and private earnings.

Senators on both sides of the aisle talk a big game about their concern for the plight of workers and their heartbreak at the conditions in which our people live. Yet, the two things senators can do to actually improve the lives of the poor and the middle class – lower taxes and raise wages – have evaded their attention. It’s difficult to blame Republicans for this sleight of gaslit economic policy because 1) they haven’t been in charge of the legislature in more than a decade; and 2) their party generally does not advocate minimum wage increases.

But Democrats do. And Democrats didn’t.

$1.3 billion of our money – a $100 million improvement in fortune – and they couldn’t cut a piece of that pie for the private sector voters they’re trying to convince to allow them to keep the senatorial majority. Remember that at the November 5 election.