Govenor Calvo's 2011 State of the Island Address

The 2011 State of the Island Address March 13, 2011 By Governor Eddie Baza Calvo Good morning, my fellow Guamanians, Christine and I, Notch and Ray have reserved a seat here in the front. It is dedicated to the unborn, those who came before us, and our sons and daughters off at war. Consul General Kimura, we also dedicate this place to those who perished from the earthquake and tsunami that hit Japan. Before I begin, may I just reflect upon our blessings from above? Three nights ago, the most concentrated waves from a tsunami passed just miles north of the Marianas. I was conducting a Cabinet meeting when a note was passed to me that a massive earthquake rocked Japan, and a Tsunami Watch was in effect for Guam. My senior staff and I left immediately to Civil Defense to command the island’s emergency operations, when the event was upgraded to a Tsunami Warning. I considered my duty as governor. I considered the trust you placed in me to keep you safe. It was, by far, the most concerning experience I have had as a leader. I had to consider the possibility that a tsunami may harm Guamanians. The government’s brave first responders acted swiftly to protect you. The mayors and vice mayors, always the leaders on the front lines of our community, were with you. They accommodated every special need and answered your concerns, without regard for their own safety. By God’s Grace, our island was spared. But our brothers and sisters in Japan were not so fortunate. Many died. Many are injured. Many are missing. I know we have many problems on our island, but it is at the core of who we are to help others in need. Consul General Kimura, I have prepared a letter to Prime Minister Kan expressing the sentiments and support of Guamanians. Please tell the people of Japan that their neighbors in Guam are coordinating a relief effort to help as much as we can. Madam Speaker, on March 11, 1980, my father took the podium at the historic Guam Legislature building across from the Cathedral to deliver the State of the Territory address. He said, “I…believe that the 1980s will be referred to as the decade of Guam’s emergence…With the help of this Legislature and the people of Guam, we can truly make the 1980s the decade of a new Guam—A Guam which can become a bright star in America’s future.” He was right. The 1980s, thanks to the leadership of my father, Governor Ricky Bordallo and Governor Joseph Ada, were the height of economic development and wealth in this island. We can reemerge. We can be stronger and we can create the Guamanian Century of prosperity. But the most important point he made was that this vision of prosperity only could be possible with the help of the Legislature and the people of Guam. The opportunities are right in front of us, but it will take a collaborative approach to bridge this island from its near-poverty to the prosperity we all want. As a gesture of my commitment to work with you, by the end of my tenure, we will once again be delivering this address at the historic Guam Legislature building. I commit to you, senators, my full support in rebuilding the original house of the people. The state of the island depends on whom you talk to. For some, the prospects of the future are great. For others, struggling and living paycheck-to-paycheck consumes their daily life. And for the most vulnerable, the state of the island means nothing when they don’t have a home, when their children have nowhere to sleep, when they are not allowed to be born, or when their disabilities are ignored. We are on the cusp of what can be the greatest economic upsurge in our history. Yet, when we look at the island we know today, there is a great divide between poverty and prosperity. We’re told about a great future, but before us now are problems that hardly lend to our ability to focus on what’s ahead. Today, my dear people, too many Guamanians are living in poverty. Parents are struggling on inadequate wages, or none at all. As of the latest employment reports and wage projections, 11,500 workers earn the minimum wage. 6,510 people are looking for a job, and more than 43,000 adults are not working, some of them facing medical challenges or disability. That is nearly 50,000 Guamanians not earning an income. These are men and women with families to feed. They have children to raise and elderly parents to take care of. But the cruel cycle of poverty doesn’t afford them this opportunity. For the great majority of the jobless, they did not receive the education they need to qualify even for entry-level positions. They did not have the money after high school to get certified for a trade, or to pursue higher education. For others, they did not have the proper family models to encourage them to be self-sufficient. This is how the cycle of poverty perpetuates itself. The economic situation for the jobless and the underemployed brought thousands to the welfare rolls. At least 43,000 Guamanians are now on some form of public assistance. Today, entire families are struggling. The increase in public assistance means fewer dollars for public schools to bring opportunity. It means fewer dollars for tax refunds. It means less funding for disease prevention and increased public health. All of this means less income for families to get by. There are 115,000 adults on this island. Unfortunately, 52,000 adults make less than $11,00 a year. That figure is important, because it represents the national poverty threshold. Nearly half of the people are not making enough to pull themselves out of poverty. Income levels are not enough for families. To make matters worse, the speculation in the market increased the cost of homes, moving the dream of homeownership even further away from the working family’s reach. There are nearly 45,000 homes in this population of 183,000 people. Half of these homes are occupied by renters. That earns us the unwelcome distinction of having one of the lowest homeownership rates in the nation. Families are saving what little they can to make a down payment on a home, only to see prices rise and to be turned down by the bank. They cannot afford land. They cannot afford construction. They can’t even afford to buy one of the 9,100 existing homes that are vacant. Our people are suffering. They’re our neighbors. They’re our friends. They are single mothers and fathers deep in debt, with foreclosures upon them, or struggling to pay the rent, with just enough gas to make it to work. They are married Guamanians who work more than one job and hardly get to see their children. And we see what’s happened to these poor kids. We see what’s occurred when children fall through the cracks. Problems show up at school, their education is interrupted, and the cruel cycle of poverty takes hold. My fellow Guamanians, the strength of society is tested upon the weakest and most vulnerable among us. I cannot, in good faith, stand here and tell you the state of the island is strong, when so many families struggle, and so many children traverse through the circumstances they are dealt. The most important point here is that the state of the island today is the condition through which children are growing up. If we want to break the cruel cycle of poverty, if we want to stop the suffering from becoming generational, if we want today’s generation of children to have more than we ever had, my dear people, the time to act is now! The government itself, for the past 20 years, has directly contributed to lower incomes and poverty. You work hard for your money. Every time you get your paycheck, the government takes part of it. Every year, you file for your return and every year you are supposed to get a refund if you overpaid taxes. My first priority, during the transition and upon taking office, was to determine the financial health of our government. The preliminary findings of my fiscal team disclosed the alarming level of liabilities of this government, to include tax refunds. These tax refunds rightfully belong to you. The government has been using your money to keep itself running. This is your money, not the government's. Not since 1991 were tax refunds paid to you in the same year you filed. This lowered your disposable income and deprived you of your opportunity to spend or save. For 20 years, the government used your money to finance its operations and the deficit, and right now, it owes you hundreds of millions in tax refunds. The average filer expecting a refund is owed thousands of dollars. None of this includes the money owed to private vendors. These companies provided goods and services to Guamanians and the government still owes them. I instructed agency heads to look at their finances and report any prior year unrecorded expenditures and unpaid debts. Preliminary estimates, which we are verifying, indicate this unrecorded debt is in the millions of dollars. These debts hurt many small businesses and may have caused some vendors to shut down or eliminate jobs. After a careful and lengthy review of the government's finances, it has become evident that the cash situation has escalated to a critical level.

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