Tuesday, January 19, 2010

DEIS perspectives: It’s a Catch-22

DEIS perspectives: It’s a Catch-22

Tuesday, 19 January 2010 05:40
by Leevin Taitano Camacho

DEIS Perspectives

THE public hearings have come to an end and most people agree that Guam will see an increase in economic activity as a result of the buildup. Some have taken it further and suggested that the additional tax revenues GovGuam is expected to receive will improve GovGuam services and the standard of living for most of us. They reason that GovGuam will be able to fix the Guam Department of Education, Guam Memorial Hospital and other public agencies with the additional $327 million collected in taxes in 2014 and $96 million collected in 2017 and onward. This logic, however, is oversimplified because it fails to take into account any costs associated with the anticipated population explosion.

According to the draft environmental impact statement, Guam is expected to receive an increase of $327 million in 2014 and a population increase of 79,178 people. This averages out to an additional $4,130 in taxes per person. By 2017 and onward, the additional tax revenue will decrease to $96 million with an increase of 33,431 people. This averages out to $2,890 in additional taxes per person, which is lower than the current amount of taxes GovGuam collects per person. In the long term, GovGuam will receive 25 percent in additional tax revenues, but will also experience a 17 percent increase in population.

To get an idea of specific costs associated with the increase in population, one need look no further than the draft impact report which predicts that agencies such as DOE, Guam Department of Mental Health and Substance Abuse other public safety agencies will have to increase their staffing by 44 percent in 2014 and 17 percent in 2017 and beyond. DOE will have to hire 420 additional teachers in 2014 to maintain the current teacher to student ratio after the influx of 6,200 students.

The response is that GovGuam will be able to pay for the increase in demand for public services with the increase in tax revenue. This begs the question as GovGuam can only tax people when they get to Guam. In contrast to GPA and GWA, which both can raise rates now to pay for improvements, DOE and other agencies rely primarily on the general fund for their budget. If GovGuam does not have enough revenue to prepare for the population boom, GovGuam will either have to take on more debt, or our public schools, hospital and other public services will be even more overburdened than they are today.

GovGuam’s financial inability to properly prepare for the population explosion is even more concerning when viewed along with the draft impact report’s explicit finding that the standard of living on Guam, or purchasing power, will most likely decrease for people on fixed incomes because of the rising costs of goods caused by the buildup. Putting two and two together, the same people who use GMH and send their children to public schools will have to endure even more overcrowding at our schools and hospital and have a lower standard of living.

The draft study predicts that Guam will see an increase in economic activity and GovGuam will see an increase in tax revenue. But the idea that GovGuam will be able to fix GovGuam agencies such as DOE and GMH or that the standard of living for most people on Guam will improve is not rooted in the text of the draft environmental impact statement.

(Leevin Taitano Camacho, a resident of Yigo, is lawyer).

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