The Guam government has slashed its spending in a last ditch effort to be able to continue providing essential services to the public.
This was revealed by the governor's chief of staff, George Bamba, in a speech before the Guam Rotary club.
He said the administration's next step after cost cutting is to raise more revenue by raising government fees to reflect the actual cost of providing those services, and restoring the tax base by removing exemptions and tax credits.
Mr Bamba said the government needs a 38 million US dollars line of credit to wipe out the projected cash shortfall for the current year.
He said past and present government leaders share the blame for the current 500 million US dollars General Fund deficit, due to yearly overspending.
Mr Bamba said Governor Felix Camacho took office with a 209 million dollars deficit, but recent court judgments for retirees and the working poor have increased it to 213 million dollars.
He said the public school system has overspent by about 42 million dollars during the past several fiscal years.
Mr Bamba says the government of Guam has been placed on a credit watch by the Standard and Poor's rating agency, and the government needs to come up with a plan within 90 days to address its deficit and cash shortfall.