September 8, 2020
Transmitted via Electronic Mail:
All Members, 35th Guam Legislature
RE: Substitute Bill 282-35
Dear Colleague,
As the oversight chair for Health, I am sharing facts regarding Substitute Bill 282-35 recently passed by this body and forwarded to the Governor for action. I have confirmed with the Director of DPHSS that the budget amount provided in Sub Bill 282-35 is enough to fund current staff and will not necessitate furloughs or reduced hours, despite threats in recent press releases or media reports. This is consistent with what OFB assured us during budget deliberations. DPHSS also told me last week that about $4 M in direct federal CARES Act funding may be used to hire 80 to 90 additional staff to respond to their needs related to COVID-19 response. In addition to this direct federal funding, DPHSS has yet to receive from the Governor the supplemental request made by former Director Linda Denorcey in June for $3 M in Coronavirus Relief Funds to support its divisions, like the Division of Environmental Health or Division of Senior Citizens who provide services on the frontlines or enforce the mandates under the public health emergency.
During discussion on the Public Health budget section, DPHSS testified and I also confirmed last week again with the Department that while the local funding amounts in the original Sub Bill were not adequate to meet the Medicaid match, the anticipated prior year lapses for Medicaid and MIP, included in the bill as amended, should be enough to match and access the full federal Medicaid amount of $129 M for FY 2021. The local match appropriation for the Children’s Health Insurance Program (CHIP) is about $2 M less than what is needed to access the full federal CHIP potential, however, Sub Bill 282 provides the same amount of funding that BBMR proposed in its rebuttal budget to OFB for CHIP. As described during budget deliberations, DPHSS must receive its lapses and transfer authority as provided by law and reaffirmed by Sub Bill 282, as amended, to maximize Medicaid, CHIP and MIP during FY 2021 for the many displaced workers who may have lost jobs and health insurance.
OFB estimated that the Governor’s 15% transfer authority would equal approximately $27 M and would be more than adequate to meet the $2.5 M overall shortfall for DPHSS compared to FY 2020.
As I repeatedly stated during our budget deliberations, prioritizing DPHSS is imperative to getting the island through this public health emergency, taking care of our residents, reopening our schools and businesses safely, and bringing back our tourists. However, I do not believe it is prudent to merely pretend to fund agencies or balance the budget by adopting higher revenues than what could be justified by OFB amidst all of the economic uncertainty. The Legislature must act reasonably under the current circumstances to hold government spending within its means and not exacerbate the challenges we face in making debt payments, prompt payment of tax refunds, the provision of healthcare and critical services and to meet the new challenges families face because of the months-long health emergency. There was some support for my proposed amendment to the budget that attempted to appropriate an additional $6 M for DPHSS operations on a quarterly basis based on actual excess collections of quarterly withholding and corporate revenues, but ultimately that failed. This option would have ensured additional revenues are appropriated to DPHSS on a quarterly basis but only when and if they are actually collected, and should be considered anew by the Legislature moving forward.
I plan to introduce this option again as a separate bill and have other proposed legislation that may tap other possible funding sources for DPHSS’ needs. Thus far there have only been four options presented with the FY 2021 budget and that is to either (1) adopt higher revenues than what OFB is predicting, (2) take any excess revenues each quarter and appropriate to DPHSS as the actual revenues come in, (3) allow the Governor to transfer funds from other parts of the budget to meet any shortfalls or (4) cut more than the $64.6 M already being cut from agencies. The bill as amended also allows the Legislature to examine excess revenues on a continuing basis and appropriate those collections as needed. We all must continue to look for alternate ways to assist DPHSS beyond the limited options discussed during our budget deliberations.
Sub Bill 282 with its $64.6 M in spending cuts from FY 2020 is by no means the easy way out. Yet it attempts to reflect the gravity of our current economic conditions, and provides tools for maximum flexibility under the circumstances by allowing the Governor to transfer approximately $27 M to any agency in need, envisions the continued use of CARES Act and federal stimulus to supplement public health and safety requirements, and allows for focused allocation of excess collections on a quarterly basis during FY 2021 to meet the critical needs of our community yet without appropriating beyond our proven means.
It is important as we move forward in addressing any shortfalls in the budget that actual facts and figures are used from the agencies impacted, and that misdirection and intimidation are left out of the budget process.
Senseramente,
Therese M. Terlaje
CC: Art San Agustin, Director, Department of Public Health and Social Services