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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