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I Maga'lahen Guåhan BIENNIAL BUDGET

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I Maga’lahen Guåhan Governor of Guam BIENNIAL BUDGET Fiscal Years 2012 and 2013 Government of Guam BIENNIAL BUDGET Fiscal Years 2012 and 2013 Eddie baza calvo I Maga’lahen Guåhan Governor of Guam Ray tenorio I Segundu na Maga’lahen Guåhan Lt. Governor of Guam Submitted to the Thirty-First Guam Legislature I Mina’ Trentai Unu Na Liheslaturan Guåhan TABLE OF CONTENTS BUDGET MESSAGE BUDGET PROCESS . 1 REVENUE & EXPENDITURE OVERVIEW . 3 ECONOMIC OUTLOOK . 15 ORGANIZATIONAL CHART. 23 SUMMARY / STATEMENT OF REQUEST. 25 OVERVIEW STATEMENTS & ACTIVITY DESCRIPTIONS EXECUTIVE DIRECTION . 33 FINANCE & ADMINISTRATION . 43 REVENUE & TAXATION . 47 EDUCATION. 51 HEALTH. 61 PUBLIC SAFETY . 67 HOMELAND SECURITY. .. 75 LABOR . 79 NATURAL RESOURCES . 85 HOUSING & ECONOMIC DEVELOPMENT . 93 TOURISM & CULTURE . 95 TRANSPORTATION . 99 UTILITIES . 103 JUSTICE . 105 PROGRAM LISTING FEDERAL PROGRAMS INVENTORY FINANCIAL STATEMENTS LEGISLATION BUDGET MESSAGE BUDGET PROCESS THE BUDGET PROCESS As required under law (5 GCA §4103 & receives more detailed hearings within the §4106), the Governor directs the preparation auspices of the applicable legislative and administration of the Executive Budget committees. Usually, a series of hearings for the government of Guam on an annual will be called during which department basis. The Executive Budget represents the heads and staff members give an overview Governor’s financial proposal with of the Governor’s proposed budget and are recommended priorities for allocating expected to provide explanations when their resources. The budget process is important department’s / agency’s appropriations are and necessary for the enactment of a budget considered. Finally, the Legislature may and review of government operations. pass a General Appropriations Bill. The Bill is then transmitted to the Governor for The Budget Process occurs in four (4) approval. Other bills to include essential phases: formulation, adoption, amendments during the fiscal year may be execution, and audit. introduced for enactment into law. During the formulation phase the economic forecast and the program and financial plans The execution phase involves the release of are prepared for the various departments. funds appropriated per the General Economic data and statistics are utilized in Appropriations Act. Each department developing projected revenues for the prepares allotment of appropriations and upcoming fiscal year. may request revisions, legislative or administrative transfers, or supplemental Once revenues have been projected, a appropriations. BBMR must approve such budget call is distributed to all the line revisions to allotments. The Bureau also agencies. This process starts when the monitors and assists agencies in carrying out Bureau of Budget & Management Research the approved budget in line with the (BBMR) issues guidelines to each line established policies of the Governor. agency in the preparation and development of their respective budgets. The audit phase involves the evaluation of departments / agencies to identify areas in The formulation phase culminates in the need of improving compliance procedures transmittal of the Program and Financial with applicable laws and regulations. Plan (Executive Budget) with the During the audit phase, financial Governor’s Budget Message to the transactions, accounts and reports are Legislature for its consideration. assessed and analyzed to improve accountability, effectiveness, and efficiency The adoption phase is the process in which in the achievement of goals and objectives. the Legislature considers the Governor’s This phase is also to assure economic use of proposal and passes the overall revenue and resources to enhance achievement of public spending plan under a General services.of goals and objectives. Appropriations Bill. The Bill usually 1 This page is intentionally left blank 2 REVENUE & EXPENDITURE OVERVIEW REVENUE AND EXPENDITURE OVERVIEW Operating Revenues – All Sources Fiscal Year 2012 Fiscal Year 2013 Operating Revenues ‐ All Fund Sources Operating Revenues ‐ All Fund Sources General Fund General Fund Special Funds 35.89% 35.34% Special Funds 6.31% 6.41% Semi‐ Semi‐ Autonomous Autonomous & & Autonomous Autonomous Federal Agencies Agencies Federal Grants‐in‐Aid Fund Fund Grants‐in‐Aid 20.53% 37.81% 37.50% 20.20% General Fund- $677,439,564 Special Funds- $120,917,059; Federal Grants General Fund- $693,738,754; Special Funds- $123,888,995; Federal Grants - in- Aid- $ 390,610,727; Semi/Autonomous- $724,839,344; in- Aid- $390,610,727; Semi/Autonomous- $724,839,344; TOTAL: $1,916,806,694 TOTAL: $1,932,928,196 The Government of Guam’s operating revenues are composed of four classifications: General Fund, Special Funds, Federal Grant-in-Aid, and Semi-autonomous and Autonomous Agencies Operating Funds. General Fund Fiscal Year 2012 Fiscal Year 2013 General Fund Sources General Fund Sources Income Tax Income Tax 59.45% 59.52% Business Business Privilege Privilege 31.43% 31.46% Others Others Federal Federal 1.19% 1.19% Other Taxes Sources Other Taxes Sources .52% 7.41% .52% 7.30% Income Tax- $402,710,412; Business Privilege -$212,900,178; Federal Sources- Income Tax- $412,892,666; Business Privilege -$218,282,984; Federal Sources- $50,228,855; Other Taxes -$3,529,781; 0thers $8,070,338 $50,669,528; Other Taxes -$3,619,372; 0thers $ 8,274,204 TOTAL: $677,439,564 Total $693,738,754 The General Fund is the fund into which all government revenues, not otherwise restricted by statute, are deposited and from which appropriations are made. The Government of Guam is the only taxing authority and there are no separate municipal, county, school district or improvement district taxes. 3 REVENUE AND EXPENDITURE OVERVIEW The three primary sources of General Fund revenues are Income Taxes, Business Privilege Taxes, also known as gross receipt tax (GRT), and Federal Sources. Income taxes account for 59.45% and Business privilege taxes for approximately 31.43% of total General Fund revenues for FY2012 and 59.52% and 31.46% for FY2013 respectively. Under the Organic Act, Guam’s Income Tax Code mirrors the United States Internal Revenue Code. As a result, the income tax laws in force in the United States are applied to the residents of the Island, however, payable to the Treasury of Guam. Gross receipts taxes are levied on a broad base of goods and services, including the sale of tangible personal property and the provision of professional service. Federal Sources include Section 30 funds. Section 30 of the Organic Act of Guam requires that all customs duties and Federal income taxes, quarantine, passport, immigration, and naturalization fees collected on Guam shall be covered into the Treasurer of Guam. These include federal income taxes from military personnel based on-island or consider Guam as their state of legal residence. With the military build-up, Guam will see an increase in military personnel which will enhance the Section 30 federal income taxes. Special Revenue Funds Fiscal Year 2012 Fiscal Year 2013 Special Funds Special Funds Tourist Others Others Tourist Attraction 28.67% 29.93% Attraction 15.54% 16.43% Solid Waste Solid Waste 17.78% 18.16% Guam Guam Highway Highway 15.22% 14.99% Customs & Quarantine Customs & 6.56% Territorial Quarantine Territorial Education 6.52% Education Facilities Facilities 16.23% 15.90% Tourist Attraction - $18,795,977; Guam Highway - $18,403,593; Solid Waste- Tourist Attraction - $20,354,269; Guam Highway- $18,568,641; Solid Waste- $21,495,640; Territorial Education Facilities- $19,619,104; Customs& $22,496,162; Territorial Education Facilities- $19,697,988 Customs & Quarantine - $7,936,699; Others-$34,666,046 Quarantine- $8,080,836; Others- $34,691,399 TOTAL: $120,917,059 TOTAL: $123,888,995 Special Revenue Funds are created by statute or Executive Order with an identified source of revenue or appropriation. Expenditures from such funds are restricted to purposes set by statute or as sources for debt service payment for bonds issued for constructing and improving major facilities and infrastructure. Several of the most significant Special Revenue Funds include the Tourist Attraction Fund, Guam Highway Fund, Territorial Education Facilities Fund, Customs & Quarantine Inspections Fund and the Solid Waste Operations Fund. 4 REVENUE AND EXPENDITURE OVERVIEW Federal Grants-in-Aid Fiscal Years 2012 & 2013 Federal Grantor Agencies U.S. Dept of Agriculture 52.62% U.S. Dept. of Education 13.22% U.S.Dept. of Health and Human Services 15.29% U.S. Others Department 11.99% of the Interior 6.88% U.S. Department of Agriculture- $ 207,125,177; U.S. Department of the Education- $52,029,388; U.S. Department of Health and Human Services- $60,182,079; U.S. Department of the Interior- $27,085,927; Others- $47,188,156 TOTAL $ 393,610,727 Federal Grants-in-Aid are funds received by the Government for public service delivery, either for specific programs or for general purpose aid. Federal Grant funds, which may require local matching funds, are requested through various Federal agencies and are spent according to the terms and conditions approved by the respective Federal grantor agency. Major Federal grantor agencies include the United States Department of Education, Health and Human Services, Interior, and Agriculture. Semi-autonomous and Autonomous Agencies Operating Fund Fiscal Year 2011 Operational Budgets Semi‐Autonomous & Autonomous Funds Guam International Guam Power Airport Authority 4.66% 47.17% Guam Memorial Hospital 14.65% Others Guam 19.73% Waterworks Port Authority Authority 8.58% 5.11% Guam Power Authority- $341,905,000; Guam Airport Authority -$33,808,160; Guam Memorial Hospital- $106,874,439; Guam Waterworks -$62,184,131; Guam Port Authority- $37,027,382; Others $143,040,232 TOTAL: $724,839,344 These funds are financed and operated in a manner similar to a private business enterprise where the cost of providing services to the public on a continuing basis is financed or recovered primarily 5 REVENUE AND EXPENDITURE OVERVIEW through user charges. Autonomous agencies such as the Guam Power Authority, Guam International Airport Authority, and Guam Waterworks Authority generate revenues to fund operational and capital requirements.
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