Gov. Lou Leon Guerrero used her final State of the Island Address to defend her administration’s fiscal record, warn against proposed tax cuts and urge lawmakers to protect what she described as hard-won financial stability amid economic uncertainty.
Speaking before the Guam Legislature, Leon Guerrero said her administration reduced annual government debt service from $92 million to $65 million, eliminated an $83 million deficit inherited at the start of her first term and generated a cumulative $297 million surplus. She also cited the establishment of a Rainy Day Fund backed by nearly $60 million and a drop in unemployment to 3.2%.
“A budget is more than numbers on a page,” Leon Guerrero said. “It is how the government protects people when outside support is uncertain.”
A central focus of the address was her opposition to lowering the Business Privilege Tax from 4.5% to 4%. The governor said the proposed reduction would cost the government more than $40 million in annual revenue and primarily benefit large corporations, while putting funding for health care, education, public safety and infrastructure at risk.
She pointed to increased federal Medicaid support as a key achievement, saying annual funding rose from $18 million to more than $145 million, with the federal match rate climbing to 83%. She also credited her administration with stabilizing government finances to improve bond ratings and strengthen investor confidence.
On education, Leon Guerrero highlighted a reported 90% graduation rate and teacher pay raises aimed at recruitment and retention. She criticized procurement requirements that she said have delayed the long-awaited construction of Simon Sanchez High School, urging lawmakers to streamline processes that slow capital projects.
"Not because the need was unclear. Not because the project was unworthy. But because one provision of law halts progress immediately, whether or not it is justified," the governor said.
In public safety, the governor cited investments in new police facilities, additional ambulances and the establishment of a nationally certified paramedic program. She said drug interdiction efforts since 2019 have kept more than 1,000 pounds of methamphetamine from reaching Guam’s streets.
She proclaimed, "Today, Guam is safer because capacity has been rebuilt and resources restored. We focused relentlessly on recruitment, strengthened the leadership bench, and restored morale, dignity, and respect to professions that carry extraordinary responsibility."
Leon Guerrero also called for progress on a new hospital, warning that Guam could lose $104 million in American Rescue Plan funds if a project is not advanced by December. She described the hospital as critical infrastructure for the island’s long-term health security.
The governor highlighted signs of economic recovery, including tourism gains, military-driven construction activity and housing initiatives. She said average power rates have declined by about 25% over the past year amid efforts to stabilize Guam’s energy sector.
Closing her address, Leon Guerrero thanked residents for their trust over the past seven years and said Guam is “stronger today than it was” when she first took office. She urged policymakers to avoid short-term decisions that could reverse financial progress.
“Our responsibility,” she said, “is to ensure that stability endures beyond any single administration.”