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Audit: Guam government owes $1B in long term debt

HAGATNA, Guam (AP) -- An independent audit shows the Guam government has more than $1 billion in long-term debt.

The U.S. territory's debt of $1.08 billion rose 44 percent in fiscal 2012, the Pacific Daily News reported Monday (http://goo.gl/8lo5M ). That's according to an audit from Deloitte & Touche LLC. Gov. Eddie Calvo's office released the audit.

The audit reported a cash surplus of $30.1 million in the government's general fund as of Sept. 30. But that surplus is primarily because of more than $358 million in bonds.

The loans were needed to immediately pay off obligations that had high interest rates, Calvo said.

"We stopped ourselves from drowning, and we're on a boat, but the waters are still turbulent," he said.

The new bonds restructured the debt to save the government about $4 million per year, the Guam Economic Development Authority said.

Guam's debt repayments will increase in each of the next three years, with annual payments scheduled to be $85 million by 2017 until the debts are paid off in 2042, according to the authority.

The bond money has been used for past-due income tax refunds and other obligations.

Calvo said the territory needs to get to a point where it pays refunds with cash set aside earlier.