For more than two years, I have called for a more accurate and realistic approach to Guam’s budgeting, urging my colleagues to recognize the gap between conservative revenue projections and actual revenue collected.

This issue has come to the fore again with the recent passage of House Bill 355-37, a supplemental appropriations measure that would appropriate $51 million in excess revenue collected in fiscal year 2024, electricity appropriations being paid for by surplus revenues from fiscal year 2025.

Although I supported the bill because I would support anything that would provide electricity credits to people during the holiday season, it was not structured in the way that I had proposed in the framework of my bill 357-37 on the extension of electricity credits.

My bill sought to incorporate more accurate revenue projections for fiscal year 2025 to fund electric credit expansion upfront, instead of relying on excess revenue from a fiscal year that had just begun.

I understand Governor Lou Leon Guerrero’s reservations regarding the precedent set by appropriating funds based on the projection of excess revenues in fiscal year 2025. If we expect excess revenues, should this not not be part of the budget projections and be affected accordingly?

The adoption of Bill 355-37 highlights a flaw in our budget process: revenue projections that are systematically too conservative. In fiscal year 2024, our tax revenues reached $1,058,616,619, far exceeding the initial projection of $149 million.

This is not a windfall but a predictable outcome, given economic indicators that point to revenue growth due to increased military capabilities.

The same low projection is evident in the FY 2025 budget, and while this cautious approach may appear fiscally conservative, it results in reactive and chaotic spending as we appropriate “surplus revenues” all the way. throughout the year as they are received, instead of in a deliberative and planned manner. budget process.

House Bill 357-37, my proposal to extend the Electricity Credit, sought to address this problem by increasing revenue projections for FY 2025 to incorporate the Electricity Credit as a planned part of the budget, thus guaranteeing the stability of our residents.

However, the final version of House Bill 355-37 instead chose to appropriate funds from “surplus fiscal year 2025” revenues, which are functionally the same revenues as we forecast, but setting a budget precedent unhealthy consisting of appropriating unrealized and unprojected excess income. Any business owner can tell you that this is no way to run a business.

Despite a slowing tourism sector, which has not yet reached pre-pandemic levels, the local economy is benefiting from a sharp increase in construction activity and federal credits that generate solid tax revenue. These factors and actual revenue tracking indicate more anticipated revenue than the FY 2025 budget projections suggest.

To break this cycle of underestimation and reactive spending, we need to consider more accurate, data-driven projections that take into account federal spending, construction growth, and real revenue tracking so we can take strategic decisions that prioritize the needs of our people from the start.

House Bill 357-37 was an attempt to move us in this direction by integrating the electric credit expansion into the budget using revised and more realistic revenue projections.

The current approach, which relies on and anticipates excess revenue, maintains uncertainty and prevents us from committing to long-term programs that would bring tangible benefits to residents.

I’m fighting so hard for this because electricity credits are not only a financial relief measure for households, they also act as a Keynesian economic stimulus that supports broader economic activity in the absence of our numbers tourism before the pandemic.

For 27 months, electricity credits put money into the hands of residents, who then spent it at local grocery stores, restaurants and other small businesses. This spending stimulates the local economy, helping to offset the economic deficit caused by persistently weak tourism.

Consider this: If families didn’t receive the $100 monthly credit, they would have to put that amount toward their electricity bills, thereby reducing their discretionary spending. For many local businesses, that $100 can make a significant difference.

That translates to dining at local restaurants, shopping at local stores, and purchases that keep businesses afloat. During the critical Christmas period, when many small businesses rely on consumer spending to survive the slower months, these stimulus measures become even more vital.

Should the Governor veto the electricity credits passed in House Bill 355-37, I implore the Legislature to consider expanding the electricity credit through House Bill 357-37 to to integrate financial relief into a stable and realistic budget plan. The benefits of this extension support consumer spending that supports our local economy.

If we fail to recognize the true state of our economy and continue to underestimate revenues, we will remain stuck in a cycle of reactive governance that does not effectively put our citizens first.