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<home> -- <speeches> -- Remarks at the Guam Chamber of Commerce Meeting on May 31, 2006                           

Congresswoman Madeleine Z. Bordallo
Remarks at the Guam Chamber of Commerce
General Membership Meeting
May 31, 2006

"The Future is Bright"

Hafa Adai!

When I think about where we were a few years ago, where we are today, and where we will be in a few short years, I think about the song that goes, "the future's so bright, I gotta wear my shades."

Thank you for inviting me to address you today. It is a pleasure to be here. This is an exciting time for Guam, and for Guam's businesses.

Guam is poised to receive a significant amount of federal investment to support an increased military presence. The increase in spending on Guam and the benefits associated with having more military personnel and their families promises to breathe new life and renewed strength into our economy.

This development also presents certain challenges to our community, to our government, and to all of you. I appreciate having an opportunity today to share my thoughts with you on how we can approach these challenges together and on how can use them as an opportunity to strengthen our community.

We have suffered through difficult times recently, and we are recovering. Large federal capital investment and other spending on Guam is a welcome prospect. This level of investment may ultimately surpass the booms of the past. It will make noticeable, positive impacts to our economy. And these impacts will drive our economy for many years to come.

Guam is on the leading edge of a wave of economic activity. It is imperative that we take full advantage of these opportunities.

These new opportunities require us to have a more focused approach to growth. Our planning efforts - those of public and private sector stakeholders - must be coordinated with the military's efforts.

I say this because work on the details of this investment has only just begun. The full scope of what is needed here on Guam has yet to be announced or, perhaps, determined. As this process unfolds, we will know more specifics and we are already learning how local infrastructure will have to interface with the planned growth.

So, I want to take this opportunity to caution everyone from fixating on specific dollar figures. The U.S. government budget process and that of the government of Japan must still approve the final dollar levels agreed to recently.

These processes are complicated and will take time to play out. For example, it is important to remember that the relocation of Marines to Guam is part of a broader package of military transformation that includes significant relocation of forces within Japan.

But regardless of what the final dollar figure for this build-up will be, we know that it will be significantly larger than anything our island has experienced in recent years. Let me briefly discuss what we know today about the anticipated build-up.

The United States Government and the Government of Japan have made a commitment to move 8,000 U.S. Marines and their estimated 9,000 family members to Guam. This realignment is the product of hard work done by many, including Deputy Undersecretary of Defense Richard Lawless. As you know, Secretary Lawless and Lieutenant General Dan Leaf, Deputy Commander of the United States Pacific Command, visited Guam last week to discuss this issue with leaders here. Preliminary planning forecasts that the movement of the Marines and the necessary construction projects to support them will be completed over the course of five to seven years, hopefully beginning around 2008.

Although it will be a couple of years before this agreement is implemented, Guam will see a significant growth in military construction projects starting this year. Guam will receive $209 million dollars worth of military construction in FY 07. This is a $119 million dollar increase over last year's military construction on Guam.

This year's increase is a part of the overall plan to develop capacity on Guam in advance of the larger bulk of military construction that is planned for Guam. That is, the Department of Defense recognizes that it must ramp-up capabilities on Guam - it's a 'rolling start', if you will.

This 'rolling start' includes expediting important projects at Andersen Air Force Base and Naval Base Guam. Accelerating the construction projects associated with establishing a global strike force capability at Andersen is one example of this 'rolling start'. Apra Harbor will also be the site of 'rolling start' work, in order to prepare its facilities there for increased use.

Although the majority of the funds will be made available in future years, increased investment on Guam begins this year. While we have adequate time to prepare, we do not have the luxury of extra time.

I made this point yesterday at my town hall meeting on small business. I want to repeat it today: preparation is crucial.  I believe that the benefits of this investment will benefit our community, directly and indirectly.

To complete contracts - whether large or small - funds will be used to buy a wide range of goods and services on island. These purchases will be distributed across all sectors of our island's economy. In short, increased military will not be limited to the construction sector. These new dollars will move through our economy - generating revenues, growing our tax base, creating jobs, and increasing economic opportunity.

For instance, it is estimated that this move will net GovGuam approximately $50 million dollars in additional income tax revenue, raising Section 30 revenues to well above $100 million per year.

Additional tax revenues from construction and service contracts will flow to the Government of Guam. To enhance tax enforcement, I will be meeting later today with the Director of Revenue and Taxation, Art Ilagan, to inform Rev and Tax that federal contract awards can be tracked by utilizing the Federal Procurement Data System. This database can provide Rev and Tax all the information needed to begin aggressive tax enforcement for off-island firms to ensure compliance with Guam tax laws, thereby leveling the playing field for all businesses and increasing local revenues.

Retail, service, hospitality industries will also receive increased revenues, as more consumers will be on island, shopping, dining-out, participating in recreational activities, and enjoying all that our community has to offer.

I agree, however, that open and frank discussions regarding the impacts this sizeable increase to our island's population will make are needed. Having these discussions will be a crucial part of our planning and preparation process.

I believe that we can work through any social impacts this relocation will require. In the end, I am confident that Guam will welcome the Marines and their family members into our community.

A second concern that we should address is the fear that off-island firms will gobble up all the big contracts. Granted, some of these contracts will be so large that they exceed the capacity of local firms. But, within those large contracts there will be subcontracting opportunities. Local firms should be well prepared to successfully bid for such opportunities and to partner with other firms. Other contracts will be smaller allowing local firms to compete successfully for these contracts. Participation by Guam's small businesses in programs such as the Historically Underutilized Business Zone program - or HUBZone program - will be one way they can compete more successfully for prime and sub-contracts.

Legislation that I had included in last year's transportation bill allows for eligible small businesses located anywhere on Guam to qualify for certification as a HUBZone company. 

But there certainly will be stiff competition for this work. Small firms from off-island will compete against you. Being a HUBZone certified company will help you be successful and gives you a "home field advantage".

A third and major concern is the labor issue. I have written to Labor Secretary Elaine Chao to request additional job training assistance, and I have discussed this issue with the Governor and with Defense officials. We are all on the same page. We have to ramp up job training programs that will anticipate the future needs. While the local workforce will not be adequate to meet all the needs and will have to be supplemented with temporary labor, it is in our island's interest to maximize our own labor pool.

We should also review the prevailing wage rate system and make the necessary adjustments so that we will attract our local people to the new jobs.

We have a lot on our plate, but let me say that having to contend with issues relating to economic growth is far better than dealing with a recession.

On last thought - I just want to remind us all that the military exists to defend our freedom and to provide the security for our prosperity. I have been to Iraq seven times, and when I get back to Washington, I will be going on my eighth trip to Iraq to visit our troops. Everywhere I go I meet servicemen and women from Guam, in the Army, Air Force, Navy, and yes, the Marines. I am so proud of the job that they are doing and their commitment to their mission. I want to close by showing you a brief video of our men and women serving in the Global War on Terrorism.

Thank you. God Bless America. God Bless Guam.

 
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