Pay hikes suspended

THURSDAY, 13 JANUARY 2011 03:08 BY THERESE HART | VARIETY NEWS STAFF

* Calvo warns of GovGuam shutdown

Governor Eddie Calvo addressed the people of Guam last night, announcing that because of the government of Guam’s critical cash position, the salary adjustments called for by the Hay Study have been suspended.

The governor said that necessary steps had to be taken immediately because the government, within the next nine months, will run out of cash. This will cause a government-wide shutdown and payless paydays.

“My fellow Guamanians, I don’t have very good news about your government tonight. I’ve made some decisions so that the public schools can stay open this year, the hospital can have medicine, and so that those most in need do not have to suffer more than they already are,” Calvo said.

“…As of today, the Hay Study is suspended. I cannot speak to the reasons our predecessors decided to implement the Hay plan based on the financial information we have before us today. All I know is that it was an empty promise, the government can’t afford it, and now our hard-working government employees will have to shoulder the burden of that empty promise,” said the governor.

Calvo promised that he will restore the Hay Study “as soon as we can afford it.”

The Hay Study was enacted into law in the 30th Guam Legislature and $13.3 million was appropriated to cover over 5,000 classified employees. The Unified Pay Structure for government employees has not been increased since 1991. The study evaluated the job classification, job evaluation and compensation of 9,500 GovGuam employees and recommended to the government that salaries needed to be updated.

Calvo said the suspension of the Hay Study is not the only cost-cutting measure he will be implementing. The Governor’s Office reduced personnel costs by 20 percent and has consolidated positions, he said.

“We’re also reducing costs in every other way we can: paper reduction, printing, postage, power and water,” he said.

Governor Calvo said his administration is exploring innovative ideas in containing the government’s spending which also includes “the health insurance liability.”

“We expect further containment of spending through innovative ideas. This includes the health insurance liability. We are looking at ways to reduce the cost of health insurance. There are legal issues we must address first… we need to determine whether, legally, this can be affected,” said the governor.

Governor Calvo issued cost-containment directives to all government departments.

“We are directing all agencies to reduce the cost of electricity by at least 10 percent. Paper reduction through greater use of digital communication, double-sided printing and recycling will be mandatory. We will authorize audits of fuel expenses and the use of 24-hour vehicles. We will be investigating the consolidation of office space to save on rentals.”

Calvo said he and Lt. Governor Ray Tenorio will lead by example. He announced that his staff “will adopt a public school to clean regularly to reduce the budget burden on public schools and the mayors.”

For his part, Lt. Governor Tenorio will be leading volunteer service projects.

“His Comps for Kids program will bring computers to classrooms. He is calling on the private sector to join his Beautification Task Force to alleviate funding strains on Public Works, Parks and Recreation and the mayors,” said Calvo.

Calvo said that if the cash gap is not closed, “those in need will suffer the most. It will negatively affect Mental Health, COLA, the hospital, and non-profit organizations like Catholic Social Services and Sanctuary. This is money to feed the homeless, shelter abused children, help victims of domestic violence, assist the elderly pay for their medication, and to aid families struggling with disabilities. We can’t leave these people behind. We can’t turn a blind eye and watch them suffer as the money runs out. And we also can’t keep holding your tax refunds.”

Calvo appealed to all government of Guam employees to understand why he had to suspend the Hay Study.

“I’m asking you to understand why this must be done. We need to make sure that our neighbors and friends most in need of help do not suffer the most. I will restore the Hay Study as soon as we can afford it. I know that with the other cost containment and restructuring initiatives we will undertake, we can get this government on track.”

“We had to act today, because I refuse to shut down the government or to have a mass layoff of teachers, police officers, doctors and other professionals of the government,” he said.