Welcome to the website of the Vice Speaker for the 33rd Guam Legislature, Senator Benjamin J.F. Cruz.

On this site you can view all of the Senator's introduced Bills and Public Laws, as well as Press Releases from his office; you can also use this site as a starting point to view relevant pages about the island of Guam.

Thank you for visiting.

Cruz FOIAs Seek Overdue Financial Reports

Wednesday, January 14th, 2015 at 12:58 am

BBMR, DOA MISSED CRUCIAL REPORTING DEADLINES


(January 13, 2015 – Hagåtña) General fund reports vital to the legislative budget process are subjects of three separate Freedom of Information Act requests issued by finance chair Vice Speaker Benjamin J.F. Cruz yesterday morning. The Department of Administration (DOA) and the Bureau of Budget Management and Research (BBMR), have missed their respective deadlines for submitting these reports and have until this Friday to furnish the requested information or provide legal authority from which the request is denied.

“With Adelup’s new refinancing measure on the horizon, we need to know if we are borrowing to save money, or borrowing because we don’t have the cash to meet our existing obligations—needing a payday loan to get us through the week,” said Cruz, who has been elected Chairman of the Committee on Appropriations and Adjudication for the 33rd Guam Legislature. “That is why these reports are important.”

In a letter to DOA director Benita A. Manglona, Cruz stated that the Guam Legislature has yet to receive the Statement of Revenues, Expenditures and Changes in Fund Balance Report for the last quarter of FY 2014. According to the “General Appropriations Act of 2014” (Guam Pub. L. 32-068:XIII:17), failure to submit this report no later than thirty (30) days after the end of each quarter will result in assessment of a $250.00 fine per missed deadline for the agency director, to be deposited into the Guam Department of Education Interscholastic Sports Program.

Cruz also seeks two reports from BBMR director Anthony C. Blaz: the monthly Comparative Revenue and Expenditure Analysis Report (5 Guam Code Ann. § 4109) for September, October, and November 2014 that should have been submitted no later than twenty (20) days after the end of each month; and a report detailing the uses of the two percent (2%) general fund reserve in FY 2012 and FY 2013 (P.L. 32-068:XIII:24) that should have been transmitted to the Speaker and the Office of Finance and Budget no later than October 15, 2014.

Pursuant 5 G.C.A. § 22436, the budget acts for FY 2012 (P.L. 31-077:I:2) and FY 2013 (P.L. 31-233:I:2) reserved two percent (2%) of revenues—approximately $11.4 million for each year—for deficit elimination. The FY 2014 budget act appropriated the FY 2013 reserves to the Guam Memorial Hospital Authority for prior obligations.

The referenced documents are appended. For more information, call the Office of the Vice Speaker at 477-2520/1 or 687-7567.

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Cruz: DOC Refused Help in FY15 Budget

Wednesday, January 14th, 2015 at 12:57 am

CORRECTIONS MGMT NEVER ASKED TO FUND ELECTRONIC LOCKS

(January 9, 2015 – Hagåtña) In response to concerns over the recurring woes of the Department of Correction’s (DOC) facilities highlighted during the site visit on Wednesday, appropriations chair Vice Speaker Benjamin J.F. Cruz is looking into any action taken by DOC management to mitigate these concerns, beginning with the electronic locks within the corrections facilities.

In a Freedom of Information Act request transmitted to DOC director Jose A. San Agustin earlier today, Cruz requested copies of any correspondence from DOC to the Guam Legislature, for the purpose of requesting funding for the repair or replacement of electronic locking mechanisms, to include security technologies and equipment.

Cruz noted in the letter that when San Agustin was asked last May to provide the department’s optimal budgetary funding level with justification based on DOC’s core mandates, DOC did not provide any public records, stating that the budget submitted by the Governor is sufficient for the fiscal year. Additionally, the DOC response indicated that management anticipates experiencing “factors” based on the rising inmate population, the number of which is “undetermined” and the impact of which cannot be “reflected”, not until such time when it occurs.

“Unfortunately, the tour of the corrections facility conducted two days ago exposed the department’s failure to act accordingly, demonstrating a lack of cognizance of its operational needs and the terms of the settlement agreement put in place by the U.S. District Court of Guam in 1991,” said Cruz, adding that the 32nd Guam Legislature’s Committee on Appropriations did not receive any requests from DOC for funds dedicated to such security systems.

“Of course, while it is my hope that my assertion is incorrect and that the department has performed due diligence in requesting funding for adequate security,” said Cruz, “I am loath to think that your office had, in its silence, placed its staff and more importantly the larger community needlessly at risk.”

The referenced document is appended. For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Cruz Seeks Rationale for DOC Bill

Thursday, January 8th, 2015 at 6:36 am

McCREADIE ASKED TO EXPLAIN WHY EXISTING AUTHORITY TO BUILD NEW PRISON DOESN’T WORK

(January 8, 2015 – Hagåtña) Following the introduction and subsequent referral of the “Department of Corrections (DOC) Construction Initiative Act of 2015”, appropriations chair Vice Speaker Benjamin J.F. Cruz has called on bill sponsor Senator Brant T. McCreadie to justify the necessity of introducing new financing legislation when existing law provides the authority the bill seeks to establish.

“[The Committee on Appropriations and Adjudication] requests justification from the author of Bill No. 5-33 (LS) relative to the need for further action when the ‘Public Safety Facilities Construction Initiative Act of 2005’ provides financing authority, to which the author himself agreed,” writes Cruz in the letter transmitted earlier this morning, referring to McCreadie’s public statements last year wherein he indicated his discovery of such statute.  “Specifically, what necessitated the introduction of new financing legislation when such financing authorization already exists?”

Enacted as Public Law 28-60, the “Public Safety Facilities Construction Initiative Act of 2005” was authored by then Senator Ray S. Tenorio.

In his exposition, Cruz noted that while Bill No. 5-33 (LS) bears slight modifications when compared to McCreadie’s earlier legislation—Bill No. 172-32 (COR) (“Department of Corrections Construction Initiative Act of 2013”)—proposing the construction of a new DOC facility, “there remain the same issues […] that have not been addressed, relative to the deficiencies in the financing of such borrowing from a proposed [DOC Building Fund].”

These deficiencies, Cruz writes, were also mentioned in the Guam Judiciary’s testimony against McCreadie’s 2013 bill and that the previous finance committee, under the late Senator Vicente C. Pangelinan, concluded that the funding mechanisms for the proposed DOC Building Fund “are neither feasible nor adequate with respect to funding the lease/lease-back or debt service payments for the envisioned construction of a new correctional facility.”

“In fact, such proposed funding mechanisms, which are still found in Bill No. 5-33 (LS), would have had negative financial implications on the Judiciary,” said Cruz, expressing his concern over the likely inadequacy of the funding source, as specified in the bill, that could threaten funds already earmarked for education, public health, or other public safety operational requirements. “Especially given the imminent increase in debt service levels in the upcoming fiscal years, the identification of an adequate and sustainable funding source continues to be imperative.”

The referenced document and its enclosures are appended.  For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

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B. McCreadie RE Bill No. 5-33 (LS) 01082015

Hybrid Plan Redux Filed as Bill No. 2-33 (LS)

Thursday, January 8th, 2015 at 6:34 am

CRUZ BACK TO WORK FOR FUTURE RETIREES

(January 5, 2015 – Hagåtña) Undeterred in his pursuit to improve the lives of thousands of future government of Guam (GovGuam) retirees, Vice Speaker Benjamin J.F. Cruz this morning introduced Bill No. 2-33 (LS), the same Hybrid Retirement System (Hybrid Plan) bill that was the focus of his work during the final months of the 32nd Guam Legislature.

Available as a retirement plan option to GovGuam employees and mandated for new hires on or after January 1, 2016, the proposed Hybrid Plan includes both a defined “floor” of benefits and a deferred compensation program as the defined contribution component.

While current Defined Contribution (DC) Retirement Plan members only receive benefits equal to the growth of their investment, Hybrid Plan members would receive a guaranteed annuity based in part on a formula that provides one and three quarters percent (1.75%) of the average annual salary—based on the highest three annual base salaries—for each year of government service.

Based on policies developed by the late Speaker Vicente “ben” Cabrera Pangelinan and drafted in collaboration with Government of Guam Retirement Fund (Retirement Fund) actuaries, investment advisors, and financial experts, the retirement reform bill also allows current DC Retirement Plan members to elect to transfer their retirement account balances into the Hybrid Plan in exchange for creditable years of service toward retirement.

“I reintroduced the Hybrid Bill untouched because it is the only legislation presently supported by the Retirement Fund,”said Cruz. “The clock ran out on the 32nd Guam Legislature but we can’t let that deter us from helping thousands of GovGuam employees who would otherwise have very limited resources for their retirement years.”

In the following days and weeks, the Committee on Appropriations and Adjudication will solicit the advice and expertise of community stakeholders throughout a series of public hearings.  The schedule notice for the first public hearing is forthcoming.

For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Round Table Hearing: GovGuam Group Health Insurance Program

Thursday, October 30th, 2014 at 9:02 am

Click below to download/view the materials used during the Round Table Hearing for the GovGuam Group Health Insurance Program on 10/29/2014

GovGuam Group Health Ins Program Roundtable – Opening Statements

GovGuam Group Health Insurance Program Presentation – Vice Speaker BJ Cruz

Click below to download/view the DOA memo’s regarding the GovGuam Health Insurance Negotiations for FY 14 and 15

Brieifng Memo FY 2014

Brieifng Memo FY 2015


Cruz Asks AG to Look Into Potential Legal Loophole in Gov’t Insurance Program

Friday, October 3rd, 2014 at 3:46 pm

EXPLOIT MAY HAVE RESULTED IN UNFAIR ADVANTAGE FOR INSURER

(September 30, 2014 – Hagåtña) As the enrollment period for government of Guam employees and retirees comes to a close today, acting legal affairs chair Vice Speaker Benjamin J.F. Cruz has called on the Attorney General (AG) to determine the statutory requirements in calculating the employee and government share toward insurance premiums. Cruz raises concerns that the law in question that was used to establish the government share for insurance premiums has consequently created an imbalanced state of medical rates for retirees.

Following concerns his office has recently heard over the Department of Administration’s (DOA) method of determining employee and employer contributions toward insurance premiums, Cruz said in a letter to AG Leonardo M. Rapadas that he found in his review of the medical insurance rates that the most expensive retiree plans had the lowest retiree contribution rates.

“Not only does this create an incentive for retirees to enroll in the most expensive retiree plans, but it also results in a disproportionately higher government subsidy for such expensive plans,” said Cruz. “Conversely, the least expensive retiree plans are under-subsidized and given a higher retiree contribution rate, thus making them less attractive to the subscriber.”

In applying Guam law (4GCA §4301), DOA chose a set of government contribution rates—set to be uniform within each class for all competing plans and not less than 50% of the lowest employee premium—for active employees and then applied the resulting employee rate—total active premium minus the government contribution—to the respective carriers’ retiree plans.

Since the law stipulates that the retiree contribution not exceed that of the active employee within the same class, the government subsidizes the difference between the two to create parity in contribution.

Cruz said that while DOA’s methods “may conform to the law,” he wants Rapadas to evaluate the manner in which retiree contribution rates were determined. “Specifically, does the language ‘contributes no more than an active employee who is otherwise in the same class’ also mean that the active employee contribution rate must only come from a plan offered by the same insurance carrier?”

Additionally Cruz has asked the AG to determine whether the law would have excluded other methods of determining retiree contribution rates. “Perhaps other methods at the discretion of DOA could have been applied that would have otherwise prevented this inequitable level of subsidy and pricing advantage given to certain carriers over others.”

“The law should be used to protect taxpayers and promote competition,” stated Cruz. “When a loophole is costing taxpayers millions and providing an advantage for one company, government officials should close that hole, not allow a select company to drive a Mack truck through it.”

For more information, call the Office of the Vice Speaker at 477-2520/1 or 687-7567.

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Cruz to Calvo: Prioritize Guardsmen in $9-M Hiring Cycle

Friday, October 3rd, 2014 at 3:43 pm

200+ GUARDSMEN STILL UNEMPLOYED

(September 18, 2014 – Hagåtña) As employment remains unrealized for hundreds of Guam Army National guard soldiers eight months after returning from their Afghanistan deployment, Vice Speaker Benjamin J.F. Cruz has called on Adelup to prioritize the hiring of guardsmen in the filling of 165 vacancies funded by the FY 2015 budget act.

The legislature had presented Resolution No. 445-32 (COR) last Monday commending the volunteers of the Guam-CNMI Committee for Employer Support of the Guard and Reserve (ESGR). “While recognition of these efforts is a meaningful gesture, it must be matched with good works,” said Cruz in a letter to Governor Eddie B. Calvo sent earlier today.

In the letter Cruz noted that he has been informed that over a third of the 600-plus 1-294th Infantry Regiment soldiers who began returning from their deployment early in January, still struggle with finding jobs. “Surely those who guarded enemy combatants and protected civilians from the wrath of war can aid in first response or law enforcement here at home,” said Cruz.“Surely we can agree that those who fought under our flag should not return home only to struggle for a job.”

“Given your public avowal of your commitment to the men and women of the Guam National Guard, I respectfully ask that you prioritize these returning guardsmen when filling the new vacancies funded by the FY15 budget law,” said Cruz, in reference to the $9-million in funded vacancies provided by the FY 2015 budget act. Of the nearly 165 positions available within the executive branch, approximately 105 are dedicated to law enforcement agencies, and another 60 are for vacancies the governor deemed necessary to the operation of various executive branch agencies.

Cruz also lamented that the dire situation in which these guardsmen have found themselves is further exacerbated by unfamiliarity with the public workforce system and lack of advisement regarding eligibility for limited-term appointments (LTA).

“To that end, I propose that the executive branch and ESGR hold a job fair for guardsmen who have recently returned from deployments,” said Cruz. “Aside from informing attendants of all unfilled government jobs, the job fair would allow the Department of Administration (DOA) to guide guardsmen through the merit system, the proper application of preference points, and the selection criteria by which candidates are evaluated.”

Cruz added that agency managers could also be on site to interview applicants who meet the qualifications required by vacant authorized LTA positions.

The FY 2015 budget act (P.L. 32-181) appropriated $6,140,483 for funded vacancies within the Guam Police Department ($1,913,203), Department of Corrections ($2,920,729), Department of Youth Affairs ($395,813), and the Guam Fire Department ($910,738). Another appropriation of $3,077,971 has been set aside for vacancies within the Bureau of Business and Management Research, DOA, Department of Revenue and Taxation, Department of Labor, Department of Agriculture, Guam Behavioral Health and Wellness Center, and/or Department of Parks and Recreation.

The referenced documents are attached. For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

PR Prioritize Hiring Guardsmen 09182014

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Cruz to Calvo: Begin Performance-Based Budgeting

Friday, October 3rd, 2014 at 3:41 pm

PROPOSAL TO CONTROL GOV’T SPENDING BY 2016

(September 11, 2014 – Hagåtña) After more than two years since the Calvo administration touted a budgeting initiative to improve the delivery of government services, acting appropriations chair Vice Speaker Benjamin J.F. Cruz has called on Adelup to finally implement this plan by selecting agencies that must submit performance-based budgets for fiscal year 2016.

In a letter transmitted yesterday afternoon, Cruz thanked the governor for signing the omnibus FY2015 budget bill but expressed grave concerns over growing public indebtedness highlighted in an audit released last April by the Office of Public Accountability and the subsequent effects it would have on government operations and services.

Cruz noted that since the governor issued Executive Order 2012-10 to create a “Performance Based Management System Executive Steering Committee”, none of the budget bills submitted since has followed guidelines of performance-based budgeting (PBB), which, as the vice speaker explains, aims to improve the efficiency of public spending by linking the funding of departments and agencies to the results they deliver.

“Perhaps it is time we revisit and complete this worthwhile initiative brought on by your administration,” said Cruz in the letter. “We can begin the process for FY 2016 with your selection of eight to 12 agencies and departments of varying sizes to submit performance-based budgets, with the ultimate goal of having all agencies and departments doing the same by FY 2018.”

The seven-person steering committee—comprised of the governor’s chief fiscal advisor, chief of staff, and communications director; and the heads of the Bureau of Budget and Management Research, Department of Administration, Bureau of Statistics and Plans, and Guam Economic Development Authority—has been primarily tasked with developing overall policy guidelines and recommendations for the successful implementation of PBB and management practices for Government of Guam entities.

Cruz is proposing that the participating agencies are to be selected based on size, e.g., departments with less than fifty (50) employees, with up to two hundred (200) employees, with more than two hundred (200) employees. PBB implementation for a large department such as the Guam Department of Education could be phased in over three years, beginning with central and ancillary services in the first year, middle and high school in the next, and elementary school last.

As early as 2008 when Governor Calvo was then chair of the Ways and Means Committee, the National Conference of State Legislators reported that Guam was moving toward PBB. In 2007, the FY 2008 budget act (P.L. 29-019), which Calvo voted to pass, added a new section that required heads from selected agencies and departments to develop and implement PBB by the end of FY 2008. In the same act, a similar mandate was added for the Guam Public School System to implement PBB for its central operations within the same timeframe.

PR PBB 09112014

The referenced documents are attached. For more information, please call the Office of the Vice Speaker at 477-2520/1 or 687-7567.

Cruz’s FOIA to Track Paper Trail of $22M in Section 30 Revenues

Thursday, July 24th, 2014 at 10:21 am

VICE SPEAKER CALLS ON DRT TO SETTLE DISPUTE OVER FY13 GOV’T AUDIT

(July 23, 2014 – Hagåtña) In preparation for the year’s budget process, Vice Speaker Benjamin J.F. Cruz has called on the Department of Revenue and Taxation (DRT) to provide information regarding the $22 million in disputed Section 30 funds that has been applied to the total federal income collections for fiscal year 2013 but whose collection status has yet to be confirmed.

DRT director John P. Camacho and deputy director Marie M. Benito appeared before the Committee on Aviation, Ground Transportation, Regulatory Concerns, and Future Generations during an oversight hearing conducted this morning.

“This Freedom of Information Act (FOIA) request has been addressed to the Department of Revenue and Taxation (DRT),” Cruz writes in his letter to Camacho,“because I have been informed that at least $15,000,000 of the $22,869,385 in additional Section 30 revenue that was recognized, was permitted on the basis of communications, formal or otherwise, between DRT and the federal government.”

In a government-wide audit report for FY 2013, Deloitte & Touche LLP applied a total of $22,869,385 in additional “Section 30 Funds” to the FY 2013 Section 30 Federal Income Tax Collections total of $96,104,113 for FY2013.  This addition was made without receipt of these funds, $15 million of which remains uncollected as of July 14, 2014.

Cruz added that despite numerous official communications and media statements made by the late Speaker Ben C. Pangelinan, Congresswoman Madeleine Z. Bordallo, and Governor Eddie B. Calvo and his communications staff regarding these funds, there has been no official communication confirming the exact amount GovGuam stands to receive in additional Section 30 funds, the date of receipt of such funds, nor the authority of GovGuam to retain the additional Section 30 funds without a federal offset.

In the FOIA letter to Camacho, Cruz is requesting information regarding the $7,869,385 and $15,000,000 in additional Section 30 revenue that was recognized in the Department of Administration’s AS400 financial management system on June 23 and June 26 respectively, to include payment status, dates of notification and transfer, and confirmation of pending deposits from the federal government.

Additionally, Cruz is seeking all communications and documentation regarding these two amounts, and a determination whether GovGuam’s $22-million debt in unused funds that were paid in advance for the Making Work Pay Tax Credit will impact the additional Section 30 revenues due to Guam.

Referenced documents are attached.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Cruz Bill to Close Another Tobacco Tax Loophole

Thursday, July 24th, 2014 at 10:20 am

BILL 384 TO BAN CERTAIN TOBACCO DISCOUNT SCHEMES

(July 22, 2014 – Hagåtña) Five months after a public health win in February with the enactment of Public Law 32-132 to establish tax parity among tobacco products, Vice Speaker Benjamin J.F. Cruz has introduced legislation to prohibit the sale of tobacco products through discounted multi-pack marketing schemes and to ultimately close another tobacco tax loophole.

“This bill aims to end the tactic of giving away free or combo-packed merchandise to make tobacco products cheaper and harder to tax, and more accessible to the youth,” said Cruz, who introduced the tobacco pricing legislation last Friday. “While there’s still a great deal of money to be made in keeping people hooked on nicotine or in perpetuating that addiction among younger consumers, there will always be a few tobacco companies that are eager to take advantage of legal loopholes wherever they exist.”

Bill No. 384-32 (COR) prohibits the sale of tobacco products to retailers or consumers through any multi-pack discounts (e.g. “Buy two, get one free”).  It also prohibits the sale or distribution of tobacco products without charge or for less than the listed or non-discounted price.

Price discounting is one of the tobacco industry’s strategies to influence purchasing and use among potential customers who would otherwise be deterred by higher tobacco prices.  These strategies offset price increases caused by tax hikes and keep products affordable and attractive, especially to those in demographics that are most price-sensitive.

While many tactics are geared toward wholesalers and retailers, recent direct-to-consumer tobacco marketing in Guam has periodically included multi-pack discounts, 75-cents-off or dollar-off deals, and other price-related incentives.  Under Guam’s existing laws, some of these marketing tactics may even allow distributors to avoid tobacco taxes altogether.

A part of Cruz’s ongoing public health campaign to reduce tobacco use and ease the burden of related government-paid health care costs on the taxpayer, Bill 384 was drafted in consultation with the American Cancer Society Cancer Action Network in Honolulu and with the support of the Non-Communicable Diseases (NCD) Consortium comprised of representatives from various government agencies, not-for-profit organizations, and the private sector.

“Public health data shows that our community’s efforts to reduce tobacco use in Guam are working,” said Cruz, referring to the 30-percent drop in the rate of smoking among adults in Guam, from 31.2 percent in 2001 to 25.8 percent in 2012.  The enactment of P.L. 30-80 in 2010 increased the tax on cigarettes and other tobacco products and allocated new tax revenues to the Guam Cancer Trust Fund for the prevention and treatments of cancers and other diseases caused by smoking and tobacco use.

According to the Federal Trade Commission, the amount spent on cigarette advertising and promotion by the largest cigarette companies in the United States rose from $8.05 billion in 2010 to $8.37 billion in 2011, due mainly to an increase in spending on price discounts in order to reduce the price of cigarettes to consumers.  Spending on price discounts increased from $6.49 billion in 2010 to $7.00 billion in 2011.

The referenced documents can be found here.  For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Cruz Introduces Minimum Wage Bill to Benefit 22,363 VS Refutes Another Minimum Wage Myth

Monday, April 14th, 2014 at 5:46 pm

(April 14, 2014 – Hagåtña) Vice Speaker Benjamin J.F. Cruz has introduced legislation to responsibly increase minimum wage from $7.25 to $10.10, that would benefit an estimated 22,363 workers and their families by 2017—with an estimated 7,840 workers seeing the first increase on New Year’s Day 2015, according to the Guam Department of Labor, Bureau of Labor Statistics.

Since Guam’s minimum wage is not indexed to the cost of living, the minimum wage must be increased legislatively from time to time to make up for the loss in its real value—or purchasing power—by inflation.  Since 1990, the island’s minimum wage has been federally increased eight times without the economic devastation typically predicted by opponents.

A recent point of contention is the false assertion that Cruz’s proposal will increase wages at a rate which is insufficient to compensate for a corresponding decrease in subsidies from the Supplemental Nutrition Assistance Program (SNAP), thus creating a disincentive to earn more.

Figures from the federal Food and Nutrition Service that administers SNAP, colloquially known as the food stamps program, however, say otherwise.  By design, SNAP not only acts as a safety net for the elderly, disabled or temporarily unemployed, but also supplements low-income wages.  As a result of the SNAP benefit calculation rules, SNAP households are financially better off if they are able to secure employment or increase their earnings (see Table 1).

No. of Income Earners

No. of Dependents

Max SNAP, $7.25 (FT)

Income + SNAP, $7.25

Max SNAP, $10.10 (FT)

Δ SNAP

Income + SNAP, $10.10

Δ Wages

Net Increase (éWages, êSNAP)

1

1

$447

$1,607

$355

($92)

$1,709

$254

$162

1

2

$668

$1,828

$576

($92)

$1,990

$254

$162

1

3

$875

$2,035

$783

($92)

$2,197

$254

$162

Table 1. Net increases for SNAP families (monthly expenses of $500 for rent and $200 for utilities) after full-time, minimum-wage earning heads of household receive a minimum wage increase to $10.10 an hour, based on FNS SNAP Eligibility Screening Tool.

According to national statistics provided by the Center on Budget and Policy Priorities (CBPP), among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP—and more than 80 percent work in the year prior to or the year after receiving SNAP.  The rates are even higher for families with children—more than 60 percent work while receiving SNAP, and almost 90 percent work in the prior or subsequent year.

“The clear majority of people on SNAP work to support themselves and their families; they just don’t earn enough to do it by themselves,” said Cruz, refuting unsubstantiated statements given by public health that were reported by media today.  “We need to ask ourselves the question: Just how much poverty should people be subjected to when working full time?  How poor should their children be?”

Introduced this morning following Cruz’s announcement at the Guam Women’s Chamber of Commerce’s forum last Thursday, the much-anticipated bill repeals and reenacts a section of the Minimum Wage and Hour Act of Guam’s Fair Labor Standards (22 Guam Code Ann. §3105), requiring employers to pay workers an hourly rate of no less than $8.20 by Jan. 1, 2015; $9.15 by Jan. 1, 2016; and $10.10 by Jan. 1, 2017.

Cruz’s “10-10” proposal will take a phased-in approach, raising the minimum wage 95 cents a year for three years until the hourly rate reaches $10.10 in 2017, a total wage increase of $2.85.

The Guam Bureau of Statistics and Plans report that costs for housing (24), food (32), medical care (15), electricity (42), and fuel (26) are all up by double-digit percentages since 2007, but local Department of Labor figures show that the average hourly rate in the private sector has only increased 14.5 percent since the third quarter of 2007 when the first of the last federal three-step wage increase was implemented seven years ago.

“As a judge, I learned that the greatest dangers to the truth are well meaning men who choose to find their conclusions first and their evidence second,” added Cruz.  “If you take an honest look at the facts, review the evidence, and analyze the Guam experience, you will find that an increase in the minimum wage does not kill jobs, cause massive inflation, or outpace public benefits; by giving minimum wage workers and their families a raise; we decrease dependence and increase dignity.”

Bill 316-32(LS) can be found on www.guamlegislature.com.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

ComparisonInTotalIncomeAndSnapBenifitsWithMinWageIncrease

Appendix4142014

Economists Support Wage Increase, Reject Job Loss Myths, Cruz to Introduce Bill to Increase Minimum Wage to $10.10

Thursday, April 10th, 2014 at 4:39 pm

(April 10, 2014 – Hagåtña) Following endorsement from both public and private sector economists at the Guam Women’s Chamber of Commerce (GWCC) wage and compensation forum today, Vice Speaker Benjamin J. F. Cruz announced that he intends to introduce legislation that mirrors the proposed federal wage increase from $7.25 to $10.10 per hour by 2017.

According to the Vice Speaker during his speech to GWCC general membership, Cruz has been consulting with Dr. Claret Ruane, Dr. Rosanne Jones, Dr. Joe Bradley, Mr. Gary Hiles and Mr. Albert Perez—all of whom provided evidence that strengthens Cruz’s call for increasing the minimum wage.

“Forty-four, twelve, six; if you forget everything else I say here today, remember those numbers,” Cruz opened, referring the growing number of women who have joined the workforce, which is now 44 percent female; the 12,160 women who live below the poverty line; and the 6,514 families presently living in poverty, 2,874 of which are headed by women with no male contributor present.

Citing alarming aggregates from data collected by both local and federal census, labor and public health agencies, Cruz underscored the rising poverty rates in Guam by emphasizing the diminished purchasing power of the dollar over the last five years that has been compounded by the flatness of Guam’s average hourly wage over said period and the significant increases in living costs.

“[T]oday’s minimum wage would have to be $8.41 an hour just to have the same purchasing power as it did [at the time] the first of three minimum wage increases went into effect in 2007,” Cruz noted, as the audience directed its attention to the graph (see attached Figure 1) in his slideshow presentation, indicating double-digit percentage increases to the cost of housing (24), food (32), medical care (15), electricity (42), and fuel (26) since 2007, according to their Consumer Price Indices (CPI) as reported quarterly by the Bureau of Statistics and Plans (BSP).

“When we are confronted by these truths, we have two choices,” Cruz stated.  “We can ignore the fact that too many women—too many Guamanians—are working harder, earning less, and paying more or we can act boldly, recognizing right as well as reality.”

Cruz’s “10-10” proposal will take a phased-in approach, raising the minimum wage 95 cents a year for three years until the hourly rate reaches $10.10 in 2017.  Cruz stated that “[d]oing so will allow our business community to adjust.”

While economists in the panel were keen to field questions from the audience about the estimated impact of a minimum wage hike, Cruz was quick to dispel misconceptions about raising the minimum wage that was last adjusted to $7.25 in 2009.  “Hourly wages, total employment, and the number of hours worked either held steady or increased when compared to the pre-raise period,” said Cruz, referring to calculations from Guam Department of Labor’s historical data for employment statistics (see attached Figures 2, 3, 4, 5, & 6).  “Put simply, the Guam experience says increasing the minimum wage does not kill jobs or cut hours.”

Referenced documents are attached.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

Wage Presentation

PR Minimum Wage GWCC Forum 04102014

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2

3

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Cruz: ICE Feds Unaware of COFA Deportation Law

Tuesday, March 25th, 2014 at 5:11 pm

(January 12, 2014 – Hagåtña) Following up on renewed efforts to seek remedy for the growing and largely uncompensated costs of hosting non-immigrant residents from the Freely Associated States (FAS), Vice Speaker Benjamin J.F. Cruz flew out to the US Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO) office in San Francisco, only to discover the incredible: the feds in charge of deportations in Guam were unaware of the very laws they are supposed to enforce.

I wanted to know why those with the power to deport criminals and deadbeats chose to do nothing while our community suffered,” said Cruz.  “It turns out the answer begins with the fact that they didn’t even know they could.

In an hour-long meeting at the ERO San Francisco Field Office last Thursday, Cruz sat down with director Timothy Aiken and deputy director John Martinez to discuss the increasing burden non-immigrant FAS residents place on Guam’s public services, more specifically services for public safety (see Table 1).  According to the 2012 Compact Impact Report published by the Office of the Governor in January 2013, Guam has spent an estimated $125 million in fiscal year 2012 on FAS residents under the Compact of Free Association (COFA), but receives only $15 million annually in federal funds appropriated to cover the impacts of the compact.

Upon mention of his unmet Freedom of Information Act request for documents to quantifiably determine the federal government’s diligence in removing deportable aliens from Guam, Cruz reported that neither the field director nor his deputy had knowledge of federal provisions for deportation of habitual residents under the COFA.

Section 214.7 of Title 8 of the Code of Federal Regulations details the consequences for habitual residents, defined as FAS citizens admitted to a territory or possession of the United States pursuant to the COFA.  Habitual residents are subject to removal if they have not been self-supporting for more than 60 days, have fraudulently received unauthorized public benefits, or are already subject to removal under immigration law, specifically Section 237 of the Immigration and Nationality Act that lists the classes of deportable aliens and provides grounds for deportation for each class.

According to Cruz, Aiken and Martinez pledged to immediately discuss the issue with Legal and continue their correspondence with the Vice Speaker.  Aiken also proposed that Governor Eddie B. Calvo sign a letter with the Vice Speaker to make the same allegations.

The feds invited people into our house under two conditions: work and contribute or study and make yourself better,” said Cruz.  “When those conditions are not met, that invitation should be revoked under federal law.

In a 2012 survey of Micronesian migrants to CNMI, Guam, Hawaii and the US Mainland conducted at the request of the government of Federated States of Micronesia (FSM), 46 percent of 3,241 responders reported that they did not work at all or had a period of unemployment that exceeded 60 days in 2011.  The report states that only 430 have been deported from the United States and its territories for felonies committed but it does not specify the period in which those deportations occurred or numbers for removals executed for other grounds of deportation under immigration law.

The 2012 Compact Impact Report from the Office of the Governor also shows figures for COFA-related public service expenditures that have skyrocketed over recent years (see Table 2).  Department of Corrections’ intake of FAS residents has increased 29.67 percent, from 873 in 2010 to 1,132 in 2012—which translates to 54,918 client days that cost the government $5.38 million that year.  Department of Mental Health and Substance Abuse (now Guam Behavioral Health and Wellness Center) also reported a drastic increase in the intake of FAS resident, from 305 clients in 2010 to 660 in 2012.  In 2010, FAS residents accounted for 11.32 percent of Guam’s total population, while total FAS population in 2012 is estimated at 22,227.

In the coming days and weeks, I am going to work with the Congresswoman’s office to help those with power understand the power that they have,” Cruz added.  “I also want to thank the many young men and women from the Compact states who are studying at GCC or UOG, working in our tourism sector or learning a skilled trade in a brutally competitive economy—you are rarely the subject of a press release but you should be; you are everything good about America and we are proud of you.

The referenced documents are attached.  For more information, call Carlo J. Branch at the Office of the Vice Speaker at 687-7567.

Aggregated data from Reports

Impact of the Compacts of Free Association On Guam FY 2004 to 2012

Hezel & Levin

Cruz Wants the Whole Truth and Nothing But Vice Speaker FOIAs Data Submitted for S&P Rating

Tuesday, March 25th, 2014 at 4:59 pm

(March 17, 2014 – Hagåtña) In preparation for the year’s budget process, Vice Speaker Benjamin J.F. Cruz has called on the Guam Economic Development Authority to produce information provided to Standard & Poor’s (S&P) Rating Agency in the last three years, to include all documents and presentation materials submitted to represent the government’s budget management, economic profile, debts and liabilities.

“As we begin this year’s budget preparations, I issued this Freedom of Information Act (FOIA) request because every time I turn around, the Calvo administration is spending money on political priorities never accounted for in the budgets he signs,” said Cruz, who transmitted the FOIA request to GEDA administrator Henry J. Taitano earlier today.

In a government-wide audit report for FY 2012, Deloitte & Touche LLP (D&T) has made similar findings, stating that the government‘s $790.7 million in unrestricted net deficiency in FY 2012(1) is a result of “long-term commitments that are greater than currently available resources”(2), and further elaborating that “GovGuam did not include in past budgets the full amounts needed to finance future liabilities arising from outstanding bonds payable, capital lease obligations and other loans as well as to pay for closure and post closure costs of the Ordot Dump, and unused employee leave balances.”(3)

In October 2013 S&P raised its long-term rating to ‘BB-’ from ‘B+’, three steps below investment grade, on the Government of Guam general obligations bonds, much to the fanfare of the Calvo administration.  However, according to the rating agency, while it considers in its analysis material information that provides relevant context or influences financial management, its assessment of financial practices is based “primarily on the existence and implementation of management practices, and not necessarily the results achieved by such practices”(4)—many of which, in Guam’s case, were implemented by Governor Calvo at the start of his term and have since been reversed in advance of the 2014 election cycle.

“With millions of dollars in clandestine tax credits, bonuses and sweetheart deals exiting our treasury,” said Cruz, whose FOIA requests last month exposed the resumption of a long-dormant tax credit for land program, “I want to know what financial representations the administration has made on our behalf, and what these representations have committed us to in future budgets.”

S&P’s general disclaimer also states that it “undertakes no duty of due diligence or independent verification of any information it receives”(5) as a part of its rating services.

Since the release of the FY2012 audit report last year, the administration has continued to boast a strong cash position using the $30.1-million surplus for FY 2012 as proof, albeit failing to acknowledge that this “positive change in fund balance was attributed primarily to proceeds of $358.2 million from the issuance of bonds,”(6) as D&T found in its FY 2012 analysis.

“Taking credit for a $30-million surplus of borrowed money is a lot like gloating over finally getting the power reconnected on payday; while Adelup claims it can walk on financial water, Guam’s future generations are those who are in danger of drowning in over two billion dollars of debt,” warned Cruz, referring to the government’s total outstanding debt, as indicated in prior independent audit reports, that has ballooned from $1.84 billion in FY 2011(7) to an alarming $2.13 billion in FY 2012(8), since Governor Calvo took office four years ago. “Short-term fixes leading up to an election year never fix long-term problems.”

Among Guam’s many long-term problems is the mounting debt service on bonds and lease payments (see Table 1) that has currently grown from $59.4 million in 2012 to $74.9 million in 2014, and will reach $99.7 million in 2015, according to figures reported in GEDA’s long-term debt abstract issued March 2013(9).

Another issue in the horizon is the narrowing debt margin due to substantial increases in public indebtedness from bonds issued since the current administration took over in 2010.  In GEDA’s latest long-term debt abstract release in March 2013, the total public debt subject to the 10 percent assessed value limitation is reported at $1.1 billion, with only $29.1 million available for future borrowing(9).

While outlook currently remains dim for future Guamanians who will be incapable of raising the funds necessary for infrastructure such as schools and roads through new borrowing, Cruz has introduced a comprehensive public-private partnership bill earlier in the legislative term that will allow future taxpayers to meet Guam’s needs without the addition of traditional debt.  Introduced in January 2013 to mobilize private resources for the purpose of financing the construction, operation and maintenance of infrastructure and development projects typically financed and undertaken by the government, Bill No. 3-32 (LS) is being revived by a number of local business leaders and public professionals.

Referenced documents are linked below.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

1 2 3 Deloitte & Touche LLP. Government of Guam Basic Financial Statements, Additional Information, and Independent Auditors Report – Year Ended September 30, 2012: A Financial Analysis of GovGuam as a Whole, p. 5 (2013). <http://www.guamopa.org/docs/GovGuam_fs12.pdf>

4 Standard & Poor’s Financial Services LLC. U.S. Public Finance: Financial Management Assessment, (2006). <http://www.standardandpoors.com/prot/ratings/articles/en/us/?articleType=HTML&assetID=1245353533578>

5 Standard & Poor’s Financial Services LLC. Disclaimers and Regulatory Disclosures.

6 Deloitte & Touche LLP. Government of Guam Basic Financial Statements, Additional Information, and Independent Auditors Report – Year Ended September 30, 2012: Financial Analysis of GovGuam Funds, p. 10 (2013). <http://www.guamopa.org/docs/GovGuam_fs12.pdf>

7 Deloitte & Touche LLP. Government of Guam Basic Financial Statements, Additional Information, and Independent Auditors Report – Year Ended September 30, 2011: Other Supplementary Information (Schedule of Outstanding Debt), p. 207 (2012). <http://www.guamopa.org/docs/GovGuam_fs11.pdf>

8 Deloitte & Touche LLP. Government of Guam Basic Financial Statements, Additional Information, and Independent Auditors Report – Year Ended September 30, 2012: Other Supplementary Information (Schedule of Outstanding Debt), p. 211 (2013). <http://www.guamopa.org/docs/GovGuam_fs12.pdf>

9 Guam Economic Development Authority. Government of Guam Long-term Debt Abstract (March 2013). <http://www.investguam.com/pdf/2013/public-finance-program/debt-abstract-march-2013.pdf>

Cruz: Tax Credits Compete with Education, Health, Safety Vice Speaker FOIAs Tax Credit Info Amid Inconsistencies

Tuesday, March 25th, 2014 at 4:58 pm

(March 10, 2014 – Hagåtña) Vice Speaker Benjamin J.F. Cruz continues his probe into the tax credit for land program that has been staunchly defended by the Calvo-Tenorio administration.

In a letter to agency directors Benita A. Manglona (Department of Administration) and John P. Camacho (Department of Revenue and Taxation), Cruz dissects several statements made last week in response to his inquiries into the recent resumption of the tax credit program deemed dormant by the Office of Public Accountability in 2007, ultimately questioning the administration’s much-hyped policy of transparency.

“Based on various defensive statements made in response to my recent inquiry into the Tax Credit in Lieu of Cash Payments program, senior members of the Calvo-Tenorio administration clearly must be disabused of the fantasy that tax credits aren’t money, that their execution does not impact the government’s cash position, and that their issuance does not compel public scrutiny,” stated Cruz.  “On this issue, as with others, administration officials have botched the facts in defense of their activities.”

Cruz cites contradictory statements made by Director Manglona and gubernatorial spokespeople Phil Leon Guerrero and Troy Torres that purport the virtues of using tax credits in lieu of cash as a sound means to avert the diversion of resources from public services, to settle government obligations, and to prevent the accrual of interest on outstanding debt.

“[E]very dollar in the current year budget has already been earmarked for education, health, safety, and General Government Operations,”Cruz said.  “Put simply, how much money should our government take from students at the Department of Education, just because the administration has chosen to prioritize one obligation of government over another?”

Cruz also highlighted the incongruity between the issuance of $2.9 million in tax credits to Layon landowners, as referenced by Mr. Torres during a media interview, and the administration’s intent to quickly settle government debt.

“[W]hy were some Layon landowners left out on a deal given to others?” the Vice Speaker asked in his letter.  “Moreover, if the interest owed has grown this debt so significantly, how does $2.9 million in tax credits paid to a special few combat the interest you fear or resolve an obligation currently estimated at $30 million?”

Cruz has requested the directors to provide him a copy of a list of all Layon landowners spreadsheet with identifying information redacted, with amounts owed, interest that has accrued to date, and the total amount of tax credits claimed, transferred, and authorized for assignment.  The Governor’s director of communications referenced the information during a media interview on March 6, 2014.

Referenced documents are linked below.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

OOPA0715 Government Tax Credits Program Performance Audit

Manglona-Camacho FOIA RE Layon Tax Credit 03102014



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Cruz Raises Concerns Over Proposed EITC Expansion Unfunded Mandate Estimated to Cost Upwards of $100M

Tuesday, March 25th, 2014 at 4:53 pm

(March 6, 2014 – Hagåtña) Vice Speaker Benjamin J.F. Cruz has issued a letter to Congresswoman Madeleine Z. Bordallo raising concerns over President Obama’s proposed expansion of the Earned Income Tax Credit (EITC) program.

A part of the President’s comprehensive budget for Fiscal Year 2015, the expansion of the EITC doubles the maximum credit to $1,000 for childless workers and extends the credit to young adult workers age 21 to 24, as well some filers who are currently above the income cutoff.  While the President plans to pay for the expansion by closing high-income tax loopholes, this becomes an unfunded mandate for Guam as it increases the annual taxpayer burden from $40 million to upwards of $100 million to fund the EITC program.

According to White House national estimates, the EITC expansion will result in 24.06% of the eligible population receiving increased allowances and an 18.13% increase to the eligible population with the inclusion of filers age 21 to 24 and 65 to 66, and those who were previously above the current income cutoff.

Cruz said in his letter to Bordallo that “while White House estimates likely do not neatly match our local realities, and a narrow estimate of projected cost would be difficult to produce considering population growth and different factors affecting final allowance amounts, a conservative estimate of costs under EITC expansion could total at least $65 million and upwards of $100 million to fund the program.”

Under current federal law, Guam taxpayers paid $47.2 million for 18,233 individual returns for Tax Year 2011 paid in 2012 and 2013.  Under the proposed expansion, projected eligible returns would total 21,538 and could cost at least $8.6 million for newly eligible filers alone, based on the current average Guam return

“Should this provision survive the budget compromise, each of our residents would be footing the bill for an unfunded federal mandate that would account for nearly 16 percent of our total current year budget or the full annual appropriations of the University of Guam, the Guam Community College, and the Judiciary combined,” Cruz warned.

Cruz illustrated the certain detriment of the unfunded expansion by appending the revenue estimates for tax changes in President Obama’s FY2015 Budget and pointing out two salient points: 1) the proposed offsets and revenue enhancements will not apply to Guam in any significant way and 2) the weight of the cost of expansion in proportion to Guam’s budget.  “While the cost of the EITC program represents a significant percentage of our budget, it is a proverbial drop in the federal government’s budget bucket,” Cruz noted.

“As such, please understand that Congress must bear the burden of this new proposed mandate upon passage,” said Cruz.  “Without Congressional funding to backstop this expansion, we will be gravely harmed by these attempts to help us.”

Referenced documents is linked below.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

MZB RE EITC 03062014

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Cruz’s In-house Counsel Bill Vetoed Agencies Stood to Save Millions in Legal Fees

Thursday, February 20th, 2014 at 2:28 pm

(February 13, 2014 – Hagåtña) Private attorneys at the Port Authority of Guam and the Guam International Airport Authority, as well those in other autonomous agencies, can expect continued prosperity at the taxpayer’s expense, as Governor Calvo runs over legislative efforts to put the breaks on legal spending.  Vice Speaker Benjamin J.F. Cruz’s In-house Counsel bill cleared the Legislature on Feb. 1 but was vetoed late this afternoon.

“In vetoing Bill 180, Governor Calvo has chosen to protect million-dollar lawyers at the Port over the 170,000 men and women who suffer higher grocery bills because the Port’s management continues to spend money like it grows on trees,” said Cruz, who introduced Bill 180 following news in September of legal fees for 2011 to 2013 amounting to approximately $1.2 million paid by the Port to private law firm Phillips & Bordallo, PC.  “When the price of food rises, know, at least in part, that the extra money is going to some lawyer the Governor cares about more than you.”

To put government spending on legal services within autonomous agencies in perspective, the Port is spending almost as much it does on its annual $1.5-million debt service for a loan to purchase gantry cranes as it does on legal services from Phillips & Bordallo.

“The fact that the Port would spend about as much money on lawyers as it does on debt service for the POLA Cranes, isn’t only wrong—it’s morally corrupt,” stated Cruz.

Cruz’s Freedom of Information Act request to autonomous agencies last year was able to collect expenditure data aggregated to total $9 million in legal expenses incurred over the last six years.  Data from the Airport indicate approximately $4.4 million in legal fees at from 2008 to 2013, with approximately $1.3 million in FY 2013 alone paid to private firm Calvo Fisher & Jacob LLP.

Data submitted by other agencies show an alarming trend of excessive legal billing in the last several years—such as Guam Memorial Hospital legal expenditure of approximately $1.7 million from 2008 to 2013; and Guam Economic Development Authority, $1 million from 2008 to 2012.

The correlation between expenditures over certain cost levels and increased rates and charges at the Port is fully supported by the Public Utilities Commission’s establishment of approval protocols for Port contracts in excess of one million dollars.

The PUC’s Administrative Law Judge Report (PAG Docket 14-02, Jan. 24, 2014) in review and approval of the existing contract between PAG and Phillips & Bordallo states, “Under 12 G.C.A. §12004, the PUC must expressly approve any contractual agreements or obligations which could increase PAG’s rates and charges.  In addition, under PAG’s Contract Review Protocol, ‘[a]ll professional service contracts in excess of $1,000,000’ ‘shall require prior PUC approval…’.”

PUC approved the continuation of the Port’s legal contract with Phillips & Bordallo, whose billing for the last three years has totaled approximately $1.2 million to date.

For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Clock Ticks on Procurement Cert Bill Cruz’s Bill 201 a Workforce Development Solution

Thursday, February 20th, 2014 at 1:52 pm

(February 12, 2014 – Hagåtña) Time is ticking for executive action on much-needed legislation that mandates course-based certification for all GovGuam procurement personnel by 2016.  Introduced by Vice Speaker Benjamin J.F. Cruz and passed by a bipartisan vote on Feb. 1, SBill 201-32 (COR) could—absent a veto—lapse into law on Friday, and begin the countdown to the October 1, 2016, compliance deadline.

“Every time procurement is stalled because of an error in the process, necessary services are denied, tax dollars are wasted, and people suffer,” said Cruz, who introduced the Procurement Training Certification bill in September last year amid a number of procurement protests that have delayed the delivery of critical services as well as prevented the use of vital equipment throughout the government of Guam.

Statutorily, the mandate would apply to all GovGuam personnel responsible for procurement of goods, services, or construction, regardless of actual classification; to include all staff within agencies authorized to conduct their own procurement, and those within the Office of Public Accountability who administer procurement appeals or audit government purchase activities.

Though the number of affected personnel cannot be precisely determined due to reporting limitations and lack of uniformity in job classification among line and autonomous agencies, a conservative estimate of GovGuam employees whose responsibilities directly relate to procurement could top 100 just in line agencies and the Department of Education alone.

While line and semi-autonomous agencies such as Department of Public Works, Department of Education, and General Services Agency process a majority of procurement activities, autonomous agencies have personnel who handle a significant fraction, both in dollar amount and volume, of government procurement annually.

Guam Community College, the administrating authority under this measure, has been training both public and private sector procurement personnel since Cruz partnered with GCC President Dr. Mary A. Okada and qualified local procurement experts over two years ago to develop a model training and certification program.

GCC Procurement Program requirements currently consist of four modules, each with at least 18 training hours, that have historically been completed within a six-month timeframe.

“Training won’t make the procurement process perfect, but it will help to make it more predictable,” stated Cruz, who has said late last year that he would have pushed for certification by 2015 were it not for budgeting issues within agencies.  “With GCC at the helm, our procurement personnel will learn one standard, apply that standard uniformly, and achieve the results we expect.”

For more information, please contact the Office of the Vice Speaker at 477-2520 or 687-7567.

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Tobacco Tax Parity Bill Passed, Cruz’s Bill 206 Both a Fiscal Win and a Public Health Achievement

Thursday, February 20th, 2014 at 1:51 pm

(February 9, 2014 – Hagåtña) Following reports of lower smoking rates after many years of tobacco control advocacy for the island, the public health community can celebrate another milestone in efforts to prevent and reduce tobacco use with the passage of legislation that equalizes the tax rate of smokeless and other tobacco products to that of cigarettes.  Introduced by Vice Speaker Benjamin J.F. Cruz, Bill 206 passed by a wide margin, 13-3, and has been transmitted to Adelup for executive approval.

The Tobacco Tax Parity Bill, which addresses the growing consumption of smokeless tobacco as a cheaper alternative to cigarettes, would resolve the disparity in the proration of taxes by increasing the excise tax rate on smokeless tobacco and other tobacco products to $40.00 a pound.

Years ago, I sponsored legislation that aggressively raised the sin tax on cigarettes to lower the frequency of their use,” said Cruz, whose work with public health advocates led to increased tobacco taxes in 2010 and the allocation of new tax revenues to the Guam Cancer Trust Fund for the prevention and treatments of cancers and other diseases caused by smoking and tobacco use.  “Now every statistic published shows that smoking is significantly decreased in all demographics.”

Data from the Guam Behavioral Risk Factor Surveillance System (BRFSS) indicate a 17.3 percent drop in the rate of smoking among adults, from 31.2 percent in 2001 to 25.8 percent in 2012.  Cigarette sales have also dropped by a third in 2012 since the 2010 increase, according to tax revenue data collected at the request of the Guam Comprehensive Cancer Control Coalition.

However, while cigarette tax revenues merely doubled as a result of the tax hike—$15.4 million in 2012 versus $7.4 million in 2008—smokeless tobacco revenues were up eight-fold, up $1 million from $125,600 for the same period.

BRFSS data also corroborate this skewed trend, with numbers that indicate adult smokeless tobacco use more than doubling in 2010 from 2009; 7.7 percent of survey responders in 2011 reported daily or regular use of smokeless tobacco such as chewing tobacco, snuff or snus.

With current rates of proration that taxes a 1.2-ounce container smokeless tobacco about $2.00 less than a pack of cigarettes, the trends in tobacco use and sales suggest a shift to lower-priced tobacco products, whose use carries similar health risks to that of cigarettes.

More alarmingly, the consumption of smokeless tobacco has risen among the island’s youth.  The rate of smokeless tobacco use among middle school and high school students is increasing—with 14 percent of high school students reporting use in 2011—and continues to exceed national rates, according to federal reports.  “The passage of Bill 206 is about preventing our youth from becoming ensnared in addiction and its associated harms,” said Cruz.

For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

Cruz Calls on DOA to Explain Changes to Hay Plan

Tuesday, February 4th, 2014 at 11:24 am

(January 21, 2014 – Hagåtña) Working against the clock to review Adelup’s 2014 Hay Plan before it lapses into law in 23 days, Vice Speaker Benjamin J.F. Cruz, chairman of the Committee of General Government Operations and Cultural Affairs, has called on Department of Administration (DOA) director Benita Manglona to provide a full briefing on the reasoning, method and purpose behind the proposed changes to the Hay Plan at a public informational hearing this Friday.

“Governor Calvo made significant changes to the Hay Plan which will cost our taxpayers more money; I don’t believe we can just let the clock run out on his decision,” said Cruz, who requested Manglona’s presence at the hearing in writing this afternoon.  “This informational briefing will provide Senators with a clear understanding of the changes he made, the reasons behind those changes, and the actions we must take in the days ahead.”

According to a press release from the Governor’s Office, among the changes to the Hay Plan proposed by the executive branch was the inclusion of senators.

“If working families in the private sector haven’t gotten a pay raise in years, no Senator should close his eyes, turn his head, and take more of the people’s money,” said Cruz, in response to the flack the Legislature has received over the last week regarding pay raises for sitting senators.  “I will only support a Hay Plan that is fair, fiscally responsible, and honest with our people about the financial condition of this government.”

Pursuant to the Government of Guam Competitive Wage Act of 2014, DOA developed recommendations for salary increases using a 2010 study conducted by Hay Group Inc.  The Hay Plan was transmitted to the Governor and the Legislature on January 15, 2014, and will lapse into law on February 14, 2014, absent legislative action.

Should the Legislature act on the Hay Plan, senators must pass a bill within 10 days of the deadline to provide the governor time to respond before the proposal lapses into law.

The Committee of General Government Operations and Cultural Affairs Committee will conduct the public informational hearing on Friday, January 24, 2014, at 10:30 a.m. in the Guam Legislature’s public hearing room.

The referenced document is linked below.  For more information, call 687-7567.

Manglona RE Info Hearing 01212014 (1)

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Cruz’s Bills Propose to Close Tax Clearance Loopholes

Tuesday, February 4th, 2014 at 11:21 am

(January 16, 2014 – Hagåtña) Continuing his longstanding efforts in addressing the need for greater transparency and increased public scrutiny of tax practices in both the public and private sectors, Vice Speaker Benjamin J.F. Cruz has introduced two sets of legislation that require tax clearances for candidates and appointments for public office, and for the professional licensure of doctors, attorneys, accountants, professional engineers, architects, and land surveyors.

Bill No. 260-32 (COR), which adds a new subsection to the Public Official Disclosure Act, mandates the inclusion of a tax clearance within the reports statutorily filed by public officials with the Guam Election Commission.  The new measure will affect the financial disclosure requirements of both elected officials and executive appointees who are subject to legislative confirmation, chief executive officers of all government agencies and instrumentalities, and individuals with the sole authority to enter into contracts.

Public officials who fail to pay their taxes shouldn’t be public officials,” Cruz said, “but until the Organic Act is amended, all our laws can do is let the light in and trust that our people can judge for themselves.

In 2011, Cruz introduced Bill No. 31-31 (COR) to require tax clearances for candidates for any elected public office, board or commission; the legislation was eventually tabled on the grounds that requirements for public office, along with other provisions in the Organic Act, may only be changed by an act of Congress.

Bill No. 261-32 (COR), which adds a section to current finance and taxation law, requires tax clearances for the issuance of professional licenses.  Granted by the director of the Department of Revenue and Taxation (DRT), the tax clearance shall indicate the filing status of returns for income tax, business privilege tax, and withholding tax; and the state of the settlement of any taxes that are due.

This bill I introduced (Bill No. 261-32) is an attempt at holding all professionals to a clear, consistent and codified standard,” said Cruz, who was compelled to take action after receiving information in October regarding inadequate professional licensing requirements.  He called on DRT soon after to provide him with a list of all professions for which licenses are required but tax clearances are not, and an estimate of the total revenue lost due to nonpayment or evasion of the Business Privilege Tax (BPT).

DRT director John P. Camacho, in his response on November 5, 2013, was able to provide the names of autonomous licensing boards and an agency whose licensing requirements do not require tax clearances (see Table 1), but could not even begin to account for the total tax revenue lost from those who have been granted such license.

Screen Shot 2014-01-16 at 2.17.45 PM

While many professional licensing boards already require tax clearances through rule, regulation, or policy; I’m embarrassed to admit that attorneys have refused to regulate themselves in this area without the force of law,” said Cruz, referring to the Supreme Court of Guam‘s decision to reject a proposal to require tax clearances for license renewals for attorneys.

In a letter to the members of the Guam Board Association (GBA) on January 3, 2014, the Court stated that the decision was based on feedback from GBA members that was “overwhelmingly against requiring such declaration”, Cruz’s criticism that the declaration requirement inadequately addresses concerns, and the Code of Professional Responsibility that already “requires attorneys to conduct themselves ethically and in conformance with the law.”

The Court has a moral obligation to ensure that its officers act ethically and pay their taxes,” Cruz said.  “It is sad that they are comfortable outsourcing that responsibility to DRT alone.

Cruz stressed that other professions may be added to Bill 261-32 (COR) after the Committee on Aviation, Ground Transportation, Regulatory Concerns, and Future Generations publicly hears both measures in February.

The referenced documents are attached.  For more information, call 687-7567.

Cruz: ICE Feds Unaware of COFA Deportation Law

Tuesday, January 14th, 2014 at 10:14 am

(January 12, 2014 – Hagåtña) Following up on renewed efforts to seek remedy for the growing and largely uncompensated costs of hosting non-immigrant residents from the Freely Associated States (FAS), Vice Speaker Benjamin J.F. Cruz flew out to the US Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO) office in San Francisco, only to discover the incredible: the feds in charge of deportations in Guam were unaware of the very laws they are supposed to enforce.

I wanted to know why those with the power to deport criminals and deadbeats chose to do nothing while our community suffered,” said Cruz.  “It turns out the answer begins with the fact that they didn’t even know they could.

In an hour-long meeting at the ERO San Francisco Field Office last Thursday, Cruz sat down with director Timothy Aiken and deputy director John Martinez to discuss the increasing burden non-immigrant FAS residents place on Guam’s public services, more specifically services for public safety (see Table 1).  According to the 2012 Compact Impact Report published by the Office of the Governor in January 2013, Guam has spent an estimated $125 million in fiscal year 2012 on FAS residents under the Compact of Free Association (COFA), but receives only $15 million annually in federal funds appropriated to cover the impacts of the compact.

Screen Shot 2014-01-12 at 4.41.16 PM

Upon mention of his unmet Freedom of Information Act request for documents to quantifiably determine the federal government’s diligence in removing deportable aliens from Guam, Cruz reported that neither the field director nor his deputy had knowledge of federal provisions for deportation of habitual residents under the COFA.

Section 214.7 of Title 8 of the Code of Federal Regulations details the consequences for habitual residents, defined as FAS citizens admitted to a territory or possession of the United States pursuant to the COFA.  Habitual residents are subject to removal if they have not been self-supporting for more than 60 days, have fraudulently received unauthorized public benefits, or are already subject to removal under immigration law, specifically Section 237 of the Immigration and Nationality Act that lists the classes of deportable aliens and provides grounds for deportation for each class.

According to Cruz, Aiken and Martinez pledged to immediately discuss the issue with Legal and continue their correspondence with the Vice Speaker.  Aiken also proposed that Governor Eddie B. Calvo sign a letter with the Vice Speaker to make the same allegations.

The feds invited people into our house under two conditions: work and contribute or study and make yourself better,” said Cruz.  “When those conditions are not met, that invitation should be revoked under federal law.

In a 2012 survey of Micronesian migrants to CNMI, Guam, Hawaii and the US Mainland conducted at the request of the government of Federated States of Micronesia (FSM), 46 percent of 3,241 responders reported that they did not work at all or had a period of unemployment that exceeded 60 days in 2011.  The report states that only 430 have been deported from the United States and its territories for felonies committed but it does not specify the period in which those deportations occurred or numbers for removals executed for other grounds of deportation under immigration law.

The 2012 Compact Impact Report from the Office of the Governor also shows figures for COFA-related public service expenditures that have skyrocketed over recent years (see Table 2).  Department of Corrections’ intake of FAS residents has increased 29.67 percent, from 873 in 2010 to 1,132 in 2012—which translates to 54,918 client days that cost the government $5.38 million that year.  Department of Mental Health and Substance Abuse (now Guam Behavioral Health and Wellness Center) also reported a drastic increase in the intake of FAS resident, from 305 clients in 2010 to 660 in 2012.  In 2010, FAS residents accounted for 11.32 percent of Guam’s total population, while total FAS population in 2012 is estimated at 22,227.

Screen Shot 2014-01-12 at 4.41.30 PM

In the coming days and weeks, I am going to work with the Congresswoman’s office to help those with power understand the power that they have,” Cruz added.  “I also want to thank the many young men and women from the Compact states who are studying at GCC or UOG, working in our tourism sector or learning a skilled trade in a brutally competitive economy—you are rarely the subject of a press release but you should be; you are everything good about America and we are proud of you.

The referenced documents are attached.  For more information, call Carlo J. Branch at the Office of the Vice Speaker at 687-7567.

###

Cigarette Sales Down but Smokeless Tobacco Up; Tobacco Tax Parity Bill Hearing Scheduled

Tuesday, January 14th, 2014 at 10:11 am

(December 9, 2013 – Hagåtña) Annual tobacco tax revenues have risen $8.9 million and annual cigarette sales have dropped by a third in 2012, but smokeless tobacco sales were up 137 percent since the enactment of Public Law 30-80 that increased excise taxes for cigarettes, cigars and other tobacco products almost four years ago.  The Department of Revenue and Taxation collected the newly released figures from the Department of Administration at the request of the Guam Comprehensive Cancer Control Coalition.

Vice Speaker Benjamin J.F. Cruz introduced legislation, Bill No. 206-32 (COR), last October to establish tax parity and curb the growing consumption of smokeless tobacco as a cheaper alternative to cigarettes.  Under P.L. 30-80, introduced as Bill 150-30 (COR) by Cruz in 2009 and signed by Governor Felix Camacho in February 2010, a pack of 20 cigarettes is taxed $3 while a standard 1.2-ounce container of smokeless tobacco is taxed $1.05.  The packaging of smokeless tobacco in smaller units incidentally allows for increased sales of a molecularly identical habitual substance.

I introduced Bill 206 because the use of chewing tobacco among our school-aged children is surging and two cans of chewing tobacco can now be bought for as little as $8,” said Cruz, referring to advertising for smokeless tobacco that has been seen posted on storefronts.

Cruz’s Tobacco Tax Parity Bill would increase the current tax rate on smokeless tobacco from $14 a pound to a new rate of $40, thus resolving the disparity in prorated taxes for the quantities of tobacco products as packaged.  The additional revenue will be allocated to the Guam Cancer Trust Fund for the prevention and treatments of cancers and other diseases caused by smoking and tobacco use.

The measure has been scheduled for a public hearing to be held before the end of the year by the Committee on Appropriations, Public Debt, Legal Affairs, Retirement, Public Parks, Recreation, Historic Preservation and Land.

We have a moral obligation as public leaders to steer our community away from dangerous products,” said Cruz.  “[Bill 206] is an important first step, and I’m confident it will get Adelup’s support.

The tobacco tax revenue data (Table 1), which includes collections for fiscal years 2008 to 2012, shows a broad disparity in the increases of annual tobacco tax collections after the enactment of Public Law 30-80, which increased sin taxes on cigarettes from $3 to $15 per 100 sticks of cigarettes and smokeless tobacco from $3.50 to $14 per pound.  According to the DOA data, whereas cigarette tax revenues merely doubled, $15.4 million in FY2012 versus $7.4 in FY2008, smokeless tobacco revenues were up eight-fold, up $1 million from $125,600 during the same period.

Fiscal Year

Cigarettes

Cigars

Others

Total

2008

(7455611.12)

(165010.81)

(125673.21)

(7746295.14)

2009

(5146610.53)

(29147.10)

(179096.28)

(5354853.91)

2010

(14103428.75)

1807.81

(718000.80)

(14819621.74)

2011

(12386896.00)

(8462.44)

(435981.14)

(12831339.58)

2012

(15496534.84)

(22497.32)

(1188990.28)

(16708022.44)

TOTALS

(54589081.24)

(223309.86)

(2647741.71)

(57460132.81)

Table 1.  Tobacco tax breakdown for Fiscal Years 2008 to 2012, obtained from DOA by DRT Revenue Agent and Disclosure Officer Lorraine M. Guerrero.

Further analysis shows that in an ideal tax collection state in 2008, Guam should have received taxes for the equivalent amount remitted from 7.4 million packs of cigarettes and 35,907 pounds of smokeless tobacco products, among other products.  In 2012 with now $15 per 100 sticks and smokeless tobacco at $14 a pound, cigarette sales were down 31 percent, accounting for taxes collected down to 5.1 million packs of cigarettes, but smokeless tobacco revenues went up 134 percent, with sales up to 84,928 pounds that year.

We need to send a clear message: those who chew tobacco must pay a rate proportionate to the healthcare costs they leave to taxpayers, and chewing tobacco should be beyond the reach of our children or the unscrupulous people who would sell it to them,” said Cruz.

The new legislation is part of Cruz’s continued public health campaign to reduce tobacco use and ease the burden of related healthcare costs shouldered by taxpayers.

Federal reports have indicated that rate of smoking among adults in Guam has dropped from 31.2 percent in 2001 to 25.8 percent in 2012 (Behavioral Risk Factor Surveillance System), but the consumption of smokeless and other non-cigarette tobacco has increased, even among the youth (Guam Youth Risk Behavior Surveillance System).  In 2011, 7.7 percent of BRFSS responders reported daily or regular use of smokeless tobacco products such as chewing tobacco, snuff or snus.  While figures for 2013 are still forthcoming, adult smokeless tobacco use in Guam has more than doubled from 2009 to 2010, according to BRFSS data.

Smokeless tobacco is just as dangerous as normal cigarettes so it only makes sense to address chewed tobacco in the manner we address smoked cigarettes,” Cruz said. “Bill 206 provides a two-fold opportunity: it addresses a growing concern in our community, and provides a new revenue source for funding public healthcare; it’s a win-win.”

The referenced documents are attached.  For more information, call Carlo J. Branch of the Office of the Vice Speaker at 687-7567.

###

Cruz: Calvo Must Prioritize DOC GG1s

Tuesday, January 14th, 2014 at 10:10 am

(November 26, 2013 – Hagåtña) Following receipt of information revealing a serious staffing problem at the Department of Corrections, Vice Speaker Benjamin J.F. Cruz has called on Adelup to expedite pending personnel action for 24 vacancies at DOC, and to ensure that Compact Impact monies are used to fill an additional 30 vacancies at the agency. Currently, DOC is operating at about 190 percent of rated capacity, and is estimated to spend an estimated $2.6 million a year in overtime pay.

Cruz made his request in a letter sent today to Governor Eddie B. Calvo, who publicly censured DOC following the assault of a woman by an escaped detainee on the lam. “Inasmuch as I concur with each of your statements [in a recent newspaper column] on this matter,” Cruz writes, “I am compelled to inform you that the cloud of failure that hangs over DOC also looms over your administration, a result of the malignant disregard with which some in your cabinet have treated this department.”

Cruz detailed in the letter the persistence of status quo despite efforts undertaken in the last 10 months to urge DOC to fill 24 funded vacancies for corrections officers and recruits, his personal entreaty to the island’s Public Safety Overseer, Lieutenant Governor Ray Tenorio, and the Legislature’s appropriation for DOC that exceeds Calvo’s FY 2014 budget request by $500,000. “With funding secured, the only hindrance that remains in this matter is the bureaucracy built to serve you,” Cruz said.

Cruz stated that in a November 22 response to a Freedom of Information Act request for copies of all Requests for Personnel Action (GG1) filed by DOC currently under executive review, DOC provided information indicating that about a third of all vacancies presently sought by the agency have been “processing” for close to two years, with a majority of these GG1s at least a year old (see Table 1). Additionally, six hires have been stalled for months pending GPD’s permission to use its polygraph machine.

Cruz has requested that the administration permit the Department of Administration and the Bureau of Budget Management & Research to meet with him on Friday to address the GG1 processing issue and order GPD to schedule polygraph examination for each of DOC’s six pending candidates no later than next week Friday.

According to DOC experts who met with Cruz this morning, the staffing problem, should it remain unresolved, will cost the agency over 10 percent of its total operating budget in overtime pay over a course of a fiscal year at a rate of $200,000 per month, totaling $2.6 million annually. “As anyone with your business acumen knows, the cost of filling vacant positions would easily be recouped by a reduction in overtime expenses,” Cruz stated.

“Governor, it is within your power to expedite these GG1s and in so doing make our families safer,” urged Cruz, who stressed that the governor, who has pledged $950,000 in Compact Impact monies, must also be cognizant of hiring timelines, such as the lead time required before full deployment to allow for adequate training, mentorship and evaluation of new correction officers.

“I have always believed that certain issues must be exempt from the politics of self-preservation; DOC is such an issue,” Cruz said.  “We may never know if additional DOC officers could have prevented the escape that led to the beating of an innocent woman but choosing to do nothing in the face of reasonable preventative steps invites greater public harm for which every elected official shall be morally responsible.”

The referenced documents are attached. For more information, call 687-7567.

###

Cruz: All GovGuam Procurement Personnel Trained & Certified by 2017

Tuesday, October 1st, 2013 at 9:27 am

(September 30, 2013 – Hagåtña) Vice Speaker Benjamin J.F. Cruz introduced legislation that would mandate course-based comprehensive procurement certification for all Government of Guam procurement personnel by 2017. Bill 201 comes amid a number of procurement protests that have stalled critical services and prevented the use of vital equipment throughout the Government of Guam, more recently the Department of Education.

“I’m sick and tired of a government that stops working in critical areas because our procurement system has us tied up in knots,” said Cruz, who introduced Bill 201-32 (COR) today. “Without comprehensive training and continuing education, any procurement solution I propose would be pointless.”

Under the new measure, personnel must complete three levels of training to continue in their capacity as procurement officials by October 1, 2017.

The basic training level must include an introduction to contract purchasing methods and ethical issues affecting purchasing decisions.
The intermediate training level must include advanced instruction in formal and informal bidding methods, introduction to negotiation methods, and instruction in writing specifications.
The advanced training level must include an introduction to complex negotiations, and instruction in the criteria for best-value product or service for the contract award.
Failure to obtain certification by the 2017 deadline would result in reassignment. Non-certified procurement personnel may receive preferential status when competing for qualified vacant positions.

“Procurement is a profession; not unlike professionals in the practice of law, teaching, or nursing, procurement personnel must meet a lifelong standard,” Cruz said. “If I had it my way, all procurement personnel would be certified by January of next year but I understand that agencies and affected personnel need time to budget for these expenses.”

Guam Community College, the administrating authority under this measure, has been training both public and private sector procurement personnel since Vice Speaker Cruz partnered with GCC President Dr. Mary A. Okada and qualified procurement experts within our community nearly two years ago to build a comprehensive training and certification program that will be used to meet the requirements of Cruz’s bill.

The referenced documents are attached. For more information, call 687-7567.

2013.09.30. – PR Procurement Training

Cruz Introduces Bill to Close Down Casino Cafes

Wednesday, September 25th, 2013 at 1:13 pm

(September 23, 2013 – Hagåtña) Following reports of the illegal operation of unlicensed gambling devices in Harmon, Vice Speaker Benjamin J.F. Cruz has introduced legislation that would prohibit gaming machines used to conduct sweepstakes, ultimately shutting down casino cafes. The final version of the bill comes after a month of consultation with the Office of the Attorney General regarding the proposed language for the measure.

Cyber casino cafes, such as the much-publicized Sweeps Center in Harmon, are establishments in which games of chance like blackjack, keno, digital horseracing and slot machines are played on computer terminals to acquire points that can be converted into sweepstakes entries with the intent of winning money. While current law already prohibits gambling machines, these cyber casino cafes combine normal sweepstakes with casino-style gambling games to operate legal casino-like establishments. Guam law did not anticipate this combination.

“Some very smart people are using 21st century technology to get around 20th century gambling laws,” said Cruz, who introduced Bill 192-32 (COR) today. “The loophole, which this new law intends to close, could allow thousands of gambling terminals to operate without any oversight, taxation or regulation.”

Under Cruz’s new measure, the operation or possession of electronic machines or devices intended to be used for sweepstakes gambling is prohibited, and such devices, upon determination of the Department of Revenue and Taxation or the Attorney General, are subject to forfeiture and/or immediate seizure. The new law does not prohibit sweepstakes activities as commonly understood.

In a letter to Attorney General Leonardo M. Rapadas earlier in July, Cruz said that while some casino cafes throughout the country have claimed legitimacy under the same premise as fast-food sweepstakes, every appellate court has found cyber gambling cafes to be commercial gambling establishments because of the duration, focus and reward system associated with their operation.

“These machines are Robin Hood in reverse; they take from the poor to give to the rich,” said Cruz, who recently called for an audit of all gambling machines licensed in Guam. The audit determined that approximately 135 machines were improperly licensed. “I fought against the licensure of gambling devices, and while the legality of 318 machines now rests with the Courts, we should be able to agree that enough is enough.”

Under the proposed measure, the owner, operator or promoter of a sweepstakes gambling device could face up five years in prison and may also be subject to a $250,000 fine per violation.

The referenced documents are attached. For more information, call 687-7567.

Cruz Introduces New Measure to Put Brakes on Excessive Legal Billing

Tuesday, September 10th, 2013 at 8:59 am

(September 8, 2013 – Hagåtña) Vice Speaker Benjamin J.F. Cruz introduced legislation that mandates the employ of unclassified in-house counsel for government agencies and autonomous public corporations permitted to retain outside counsel under existing law. The bill comes in the wake of news regarding exorbitant legal fees at the Port Authority of Guam.

“Good legal counsel is essential but taxpayers shouldn’t have to pay hundreds of thousands of dollars when a more cost-effective option exists,” said Cruz, who introduced Bill 180-32 with co-sponsor Senator Tom Ada last Friday. “Under this bill, taxpayers save money and agencies still receive sound legal advice.”

Under existing law, an agency permitted to retain counsel other than the Attorney General (AG) issues a request for proposal under procurement law and the agency’s governing board approves a contract. At present there is no limitation on the legal billing amount for each agency.

Cruz’s measure would require agencies to hire unclassified in-house counsel, in lieu of contracting legal services through private attorneys, for no more than $125,000 unless a special need exists. Currently legal services contracts have cost the taxpayer millions of dollars in the past decade.

In the event outside council is necessary because neither the AG nor the In-house Counsel is able to address a “sole and specific” legal matter, the new legislation would allow the agency to retain legal counsel when that legal issue involves a particular specialty.

Under the proposal, the AG must certify the need for outside counsel in writing to the Speaker of the Guam Legislature and the Governor of Guam. The outside counsel must have at least five years’ experience and competency in maritime law, aviation law, healthcare law, or the issuance of bonds or other financial instruments. The authority for outside counsel would extend only to the specific legal matter before the agency.

“Every dollar paid to a private attorney is a dollar we don’t pay to teachers, nurses, or police officers,” stated Cruz. “In my time in the legislature, I’ve learned that legal bills grow larger and larger without any real limit or safeguard; excessive legal contracts are a bad habit we have to break.”

The Vice Speaker has taken a similarly strong position against excessive legal billing in the past. In response to mounting legal fees of over $800,000 incurred by the Guam International Airport Authority for fiscal year 2008, Vice Speaker Cruz introduced Bill 192-30 in 2009. The measure authorized the AG to delegate to the Airport’s staff attorney the duty of representing the agency during litigation.

The referenced documents are attached. For more information, call 687-7567.

2013.09.06. – Bill 180-32 (COR)
2013.09.08. – PR In-house Counsel
###

DRT Reports At Least $2.1 M Owed in Hotel Occupancy Tax, Cruz Calls for Independent Audit

Tuesday, September 3rd, 2013 at 12:20 pm

(August 11, 2013 – Hagåtña) Vice Speaker Benjamin J.F. Cruz is calling for the independent audit of all 39 hotels and motels operating in Guam following receipt of a summary from the Department of Revenue and Taxation (DRT) confirming the delinquency of at least 10 accounts in remitting hotel occupancy taxes (HOT). According to the DRT figures submitted in response to Cruz’s Freedom of Information Act request last month, the hotels—many shown to share a long history of delinquency in HOT remittance—owe $2.1 million in taxes.

Covering a period from January of 2004 to August 7, 2013, the DRT summary of delinquent accounts in HOT remittance, shows 10 hotels—each name redacted and assigned a letter of the alphabet—and the amount of taxes owed by year and by month of each year. While some have less than a dozen months of delinquency, many appear to have multiple years of outstanding taxes. One hotel, labeled “Taxpayer D”, appears to have failed to remit taxes for 44 months over the last five years, and owe close to a million dollars in HOT.

While DRT’s FOIA response confirms the information the Vice Speaker recently received from tourism leaders regarding uncollected HOT revenue within the hotel industry, Cruz has found the summary incomplete for the purposes of his probe, as it fails to indicate the actual periods of operation for each delinquent hotel. Additionally, taxes owed could exceed $2.1 million since the HOT is collected on the honor system and the process by which taxes are assessed, collected, and verified is unclear. It is also unknown how the delinquent hotels were allowed to renew their business licenses in subsequent years.

“Every time DRT gives me answers, I am forced to ask more questions,” Cruz said in response to the summary report. “If the tax man can collect what your family owes the government, why can’t the tax man collect what hotel owners owe our community?”

Cruz will request to meet with DRT Director John Camacho in advance of a budget provision, in collaboration with the Chairwoman of the Tourism Committee, that will conduct a comprehensive audit of the occupancy tax assessment and collection and also compare the amount of tax collected against the number of room stays.

“I don’t want to shut down hotels; I want to help protect the businesses that pay their taxes and play by the rules,” Cruz stated. “If your competitor doesn’t pay his taxes every year and he is still allowed to operate, he’s cheating you and everyone else in the industry; that is more than wrong—it’s criminal.”

Persuant to Title 11 Chapter 30 §30105, willful failure to pay over the hotel occupancy tax warrants a referral to the Attorney General for prosecution.

Leaders in Tourism Industry Tell Cruz Some Hotels Aren’t Paying Hotel Occupancy Taxes: Guam May Lose $10million This Year

Tuesday, September 3rd, 2013 at 12:20 pm

(July 23rd, 2013 – Hagåtña) At a recent lunch with leaders of the tourism industry Vice Speaker Benjamin J.F. Cruz was informed that as many as a dozen hotels are not remitting the Hotel Occupancy Taxes (HOT) they continue to charge to their guests.  These industry leaders, who have asked to remain anonymous, believe that this willful violation of the law may lose the Guam Taxpayer as much as $10million this fiscal year.  This is why Cruz’s office issued a Freedom of Act request to Department of Revenue and Taxation Director John Camacho, earlier today.

Cruz writes, “These community concerns must be verified and confronted or debunked and put to rest.”  Cruz has specifically requested the following information:

1)  The total number of Hotels compared to the total number delinquent in the remittance of the HOT.

2)  The number of months each hotel has been delinquent and the amount due to be collected (specific hotel names are to be redacted and assigned a letter of the alphabet).

Cruz points out that:

Title 11 Chapter 30 section 30105 reads as follows:

“Section 30105. Willful Failure to Collect or Pay over Tax. Any person, required under this Chapter to collect, account for, and pay over the tax imposed by this Chapter, who willfully fails to collect or truthfully account for and pay over such tax shall be guilty of a felony.  Evidence of personal use of any such tax so collected by the person charged with collection, either in his business or otherwise, shall constitute prima facie evidence for willful failure to truthfully account for and pay over such tax in violation of this Chapter.”

In the event that the HOT has gone willfully uncollected, Cruz asks, how many individuals have been referred to the Attorney General for prosecution and the outcome of each referral.

Cruz to Calvo and Fernandez: Monday Is Last Day to Register for GCCs Fundamentals in Procurement Training Course

Tuesday, September 3rd, 2013 at 12:13 pm

(July 3rd, 2013 – Hagåtña) Vice Speaker Benjamin J.F. Cruz wants every government employee involved in public procurement properly trained and equipped to do their jobs. In a pair of letters released by his office today, Cruz encouraged Governor Eddie Baza Calvo and DOE Superintendant John Fernandez to send the island’s public procurement personnel to upcoming training courses offered by the Guam Community College. Module 1: Fundamentals & Principles of Procurement will begin on July 8. Registration must occur by 2p.m. that day. Module 1 is a prerequisite for all other procurement training courses.

Cruz worked with the Guam Community College and other community stakeholders to create a training course focused on preventing procurement challenges by increasing core competencies among procurement personnel throughout the government. “I want to thank President Okada for her vision and dedication to this program, she understood from the start just how important this was. The Course’s success is directly attributable to her hard work and the continued effort of its instructors.”

With public procurements of every type and size seemingly under an endless barrage of protests, Cruz Says, “Asking someone to work in government procurement without meaningful and substantive training is like sending a soldier into battle without his riffle.”

The schedule of courses for other modules is as follows:

Module 2: Solicitation Process: August 12 – 30
Module 3: Procurement Review and Remedies: September 9 – 27
Module 4: Management & Administration of Procurement: Oct. 7 – 25

The referenced documents are linked below. For more information, call 477-2520.

To DOE Fr BJCruz GovGuam Procurement Course Enrollment for GovGuam Personnel

To Governor Fr BJCruz GovGuam Procurement Course Enrollment for GovGuam Personnel

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