THE governor and members of his Cabinet traveled to the United States last week to make presentations to bond rating companies to convince bond investors to, once again, buy $100 million of Guam bonds. The presentations are occurring even though the administration has stopped all reporting to the Legislature and the people of Guam of how much tax revenue is being collected.

This comes on the heels of the governor proclaiming that the government suffers from a $40 million shortfall in the budget, the revenues and expenditures for which were developed by him and his entourage. Making matters worse are the looming reductions in federal funding for Guam as a result of the congressional supercommittee’s inability to reach consensus on a comprehensive federal deficit reduction agreement. Sound familiar?

The bond rating presentation game can appear confusing. One might ask, How can we get a good rating on a bond at the same time the most recent Guam Performeter scored the government of Guam’s financial strength 1.27 out of 10, worse than most of our neighbors we call “basket cases?” The reason is because Wall Street bankers and investors do not necessarily care about whether the government can pay all its employees or pay bills owed to local vendors and suppliers, but rather it cares about whether the pledged revenue stream has enough guaranteed collections to cover the bond payment and that they get their payment first, before the money is ever placed in the General Fund.

This is exactly what the governor promised them: bondholders first, then everything and everybody else at the end of the line, including our own people to whom we owe tax refunds. All gross receipts taxes collected go first to the bondholders’ trustee, who takes what is owed and then sends the rest to the government of Guam. We no longer control our revenues or decisions on these revenues. This Business Privilege Tax (BPT) collects a little more than $200 million annually or almost $17 million month. The new $100 million bonds being sold will have an annual payment likely around $7 million per year. This amount represents 3.5 percent of the BPT revenue collections. Rating agencies are not concerned with Guam’s Performeter rating because they know that the investors are first in line to get paid from BPT revenue, which only represents 3.5 percent of the total. The question now is, What happens to the employees that work in programs serving you, the taxpayers, that were funded from the $7 million? Will we still have money to pay tax refunds next year without having to borrow more money?

To make sure we knew what the governor was promising Wall Street, we set up in law the Fiscal Responsibility and Tax Refund Commission (Deficit Commission). Public Law 31-76 requires the Deficit Commission to look ahead at our existing expenditure patterns and revenue collections to develop recommendations on how to balance the annual budget, specifically to ensure the payment of income tax refunds will be on time after our borrowing.

Instead, we now have yet another task force designed to shove down your throat exactly what the administration wants you to believe – can’t cut this, need to outsource that, the retirees cost too much, we will give raises. Public Law 31-76 also requires that the creation of a Deficit Reduction and Fiscal Reform Plan by the Governor’s Fiscal Responsibility and Tax Refund Commission must be completed before incurring further debt. The governor and his Cabinet have been aware of this requirement since Sept. 15, 2011, yet his Deficit Commission met once, which turned out to be nothing more than a photo opportunity and a press release. It has become very clear that the administration is content to spend more time creating theater than it does actually doing the work of the people. This failing of the governor and Deficit Commission to the people will not go unnoticed as the government continues to operate in chaos with no monthly income tax refund payments, no financial reports, threats of layoffs, threats to cut retiree benefits, and promises of raises.

Confused? Me too. I just wonder what script the governor will use when he meets with Wall Street.