Guam’s governor approved a fiscal 2023 general fund net budget 14.4% larger than the current one, as revenues continue to exceed forecasts, offering some financial flexibility.
Guam Gov. Lourdes Leon Guerrero signed the legislature-delivered budget earlier this week, but warned lawmakers about planning uses for excess revenues before an audit.
In a memo to Legislature Speaker Therese Terlaje, the governor expressed “concern about several provisions in the bill that continue the legislature’s recently adopted practice of appropriating so-called ‘excess revenues.'”
“Payables may not accrue in the years expenses have been incurred,” Leon Guerrero said, with revenues, at times received in fiscal years after they were reported.
“Though our administration will work to implement this budget bill, it is important for the legislature to observe sound accounting principles in its appropriations, and to refrain from continuing to appropriate from ‘excess revenues’ prior to the audit,” Leon Guerrero said.
Total general fund revenues came in 9.9% higher than budgeted through the first 10 months of the current fiscal year, according to the Guam Bureau of Budget and Management Research.
Moody’s Investors Service Senior Analyst Pisei Chea said, “Guam’s strong revenue performance compared to budgeted revenue for fiscal 2022 provides financial flexibility for the upcoming fiscal year, but the government’s use of excess revenue for ongoing expenditures may hinder its ability to maintain structurally balanced operations.”
July general fund revenues came in 22.9% above the budgeted projection. Through the first 10 months of the fiscal year, revenues were1.7% ahead of the first 10 months of fiscal 2021, according to the bureau.
The approved fiscal 2023 general fund budget has $809.922 million in total revenues and $713.256 million in net revenues, $199.94 million in special revenue funds, and $109.468 million in federal matching grants-in-aid. The special revenue funds budget is up about $1 million and federal matching grants-in-aid budget is down about $6 million from the current fiscal year.
Moody’s rates the islands’ Business Tax Privilege Tax bonds Ba1. S&P Global Ratings rates the general obligation bonds BB-minus.
The approved budget includes $70.821 million for debt service.