WITH layoffs looming in the government of Guam, Vice Speaker Benjamin J.F. Cruz believes there are other cost-cutting alternatives apart from actions affecting government personnel.

Cruz identified about $34.4 million in potential savings for GovGuam, which comes in a number of alternatives to Gov. Eddie Calvo’s proposed $43 million in cuts to government spending.

As guest speaker at the Rotary Club of Northern Guam weekly meeting yesterday at the Hyatt Regency, Cruz pitched his ideas to the members as he explained how those measures won’t have to target employees, as intended by the governor.

“As many of you know, the governor announced that he wanted to find $43 million to slash from the government budget, and unfortunately he identified employee benefits that could be eliminated or reduced; and that really concerned me,” Cruz stated.

In addition to the proposals he proffered to the governor and various agency heads on rightsizing the government, Cruz went on to explain why he also wanted to speak to the business community.

“I wanted to remind everybody that in rightsizing government and using employees as the way of rightsizing it – by laying them off – it’s your businesses that’s going to suffer,” he told the Rotarians.

Everybody suffers

He pointed out that once people are unemployed, they wouldn’t be able to shop or dine at some of the establishments of the business owners. They likely wouldn’t be buying newspapers or the ads to sustain that paper either. “It all suffers,” Cruz said. “The only one that benefits from people being laid off, unfortunately, will be those businesses that can use the Quest card, because [the unemployed] will all migrate over to the Public Health and Social Services to be able to receive SNAP (Supplemental Nutrition Assistance Program) and those stores are going to be the ones that receive the benefit, and that just does not do well for the economy.”

In hopes of preventing that from happening, Cruz and his staff explored and discussed ideas that would cut expenses without affecting personnel.

“The government was right to try to find some way to reduce our expenditures and there is no question that we should rightsize government, but rightsizing shouldn’t be on the backs of the employees in laying off people.”

Instead of layoffs, eliminating or reducing government employee benefits and eliminating or reducing retiree Cost-of-Living Allowances, Cruz proposed a number of alternatives that would save the government millions of dollars.

Alternatives

Among the $34.4 million in potential savings, Cruz proposed ending paper checks, which would save about $500,000. According to a 2004 Office of Public Accountability report, it was discovered that the issuing of paper checks was too labor-intensive and costly.

Currently, the Department of Administration and the Guam Department of Education still issue paper checks, while autonomous agencies use the Automated Clearing House. The OPA also suggested redirecting accounting personnel to follow up on bounced checks and late payments.

Other cost-saving measures Cruz proposed was $1.5 million by fixing Guam Memorial Hospital’s billing system; $7 million by promulgating a fee schedule at the Department of Mental Health and Substance abuse; $500,000 through LED lighting partnerships for schools; $13.5 million by pursuing insurance rebates; $4.2 million through Cooperative Purchasing; $900,000 through a government-wide telecom procurement; and finally, $6.2 million by maximizing retiree enrollment in Medicare.

Cruz says that as a result of the retiree enrollment in Medicare, premiums for healthy active employees likely would be reduced.

In addition to the alternatives Cruz identified, he further proposed aggressively pursuing Compact-Impact reimbursements. According to Cruz, inmates from the Freely Associated States cost the Department of Corrections $7 million a year. He also discussed enforcing terms of the Qualifying Certificate program.

“There are other ways that I think we can rightsize government and I’m hoping that you will support some of these issues and see that they have some benefit and that it shouldn’t just be laying off people because that just doesn’t do us any good – especially with the 13 percent unemployment rate currently,” Cruz concluded.