Surplus, future economic growth to pay for pay raises

The government of Guam’s multi-million dollar surplus (see note at bottom) will pay for this year and next year’s proposed pay raises for the public employees on the General Pay Plan. The taxes collected from the economic boost anticipated from the military buildup and federal infrastructure spending will sustain affordability of the pay raises in the years following. This is according to the government’s chief cash manager, director of administration Ed Birn.

Following Gov. Lou Leon Guerrero’s request to senators for the money needed to budget the pay raises, Kandit asked the governor’s office to explain “to our readers how the government of Guam will afford the General Plan Pay raise – not just this upcoming fiscal year, but for the foreseeable future.”

Mr. Birn replied with the following:

“We believe that people are our greatest asset and our most important resource. It’s imperative that we invest in our hardworking employees and adjust their salaries when warranted. This administration has already proven its fiscal responsibility by eliminating the $83.4 million deficit, creating a $113.9 million cumulative surplus since Governor Leon Guerrero took office and paying tax refunds on time. 

“This pay review, which is a statutory duty of the Department of Administration to perform, has been introduced for funding at a time when revenues are rising, not falling.  There can be no better condition to support the expenditure than now when revenues outperform budget forecasts and the $16 million estimated cost for FY2023 has already been realized in collections.  For FY2024, the additional payroll cost of the GPP compensation review has been embedded into the Executive Budget submission and can clearly be sustained.  Beyond FY2024, both the military build-up and projects funded by the Infrastructure Investment and Jobs Act will support a vigorous economy.  These investments will also show positive returns as the Marines are finally relocated providing additional revenues to our Section 30 collection and through additional spending in the local economy.  

“A pay adjustment to those employees under the General Pay Plan is overdue.  There has been no pay review for eight years and that review was based on data that was already two years out of date.  

“Again, we believe our employees are our greatest asset and our most important resource.  A fair wage is justified, and the government can only benefit from retaining the best workers in the service of the people of Guam.”

NOTE: GovGuam’s surplus is the result of federal tax dollars secured for the government of Guam by the efforts of former Congressman Michael San Nicolas. These federal tax dollars were authorized and appropriated to Guam during the pandemic. They include unprecedented amounts of federal pandemic funds, increased Medicaid match funds, the first-time reimbursement of the earned income credit, the payment of war claims, which now leads to the full realization of increased Section 30 funds, and more.