GOV. Calvo now has in his hand the final nail for the GovGuam financial coffin, and has voiced his intent to immediately begin to pound it home. He has authority (though no obligation) from the Guam Legislature to subject this and future generations to $100 million of debt on top of that already incurred through a non-stop borrowing spree that began nearly a decade ago.

The “Flashback” feature on page 7 of the March 29, 2012 Variety briefly described the U.S. Supreme Court ruling on a lawsuit that pitted then-Guam Attorney General Doug Moylan against the government of Guam relative to borrowing and public debt limits. He seemingly prevailed in his attempt to protect us from runaway GovGuam borrowing when the U.S. Supreme Court overturned an earlier ruling by the Guam Supreme Court.

There’s much more to the story, and it’s time to remind Guam voters of exactly what the U.S. Supreme Court said and what it tried to convey. Several Guam Legislatures and two administrations have subsequently conspired to subvert and circumvent Organic Act protections against the “crushing debt” the U.S. Supreme Court envisioned and warned about in that decision and we are now, and for some time have been, in that crushing vise.

At the heart of the public debt controversy was this question: Does the Organic Act, in limiting Guam public debt to “10 per centum of the aggregate tax valuation of the property in Guam,” mean appraised value or assessed value? The AG had refused to sign a bond-borrowing bill because he believed it would breach the public debt limit. The administration – and the Guam Supreme Court – contended that the limit applied to “appraised” value while the AG favored the “assessed” value version.

Here’s another “Flashback” that you won’t find in your daily dose of local media pap: On April 17, 2007, Guam Public Auditor Doris Flores Brooks publicly acknowledged in a K-57 talk radio interview that she believed, in accordance with generally accepted accounting practices and principles, that GovGuam public debt at the time exceeded the Organic Act ceiling. She declined to estimate by how much and pointed at the Attorney General as the final authority on the legal determination of what constitutes public debt.

As we all know, Guam public debt has increased radically since that time, while little has changed relative to Guam’s real “aggregate tax valuation” other than through creative accounting. So how have our governors and lawmakers managed to maintain at least the appearance of legality as they regularly float bond after bond and borrow hundreds of millions?

They’ve done it through manipulation of the Guam real property tax structure, changing legal definitions to fit parameters of their bond borrowing frenzy. They’ve routinely artificially increased “tax valuation” by changing the tax assessment formula, carefully restructuring tax levy computations to avoid any hint of a tax increase.

The latest such scheme, resulting from Bill 414 and concurrent changes in the real property tax code, brings them up against what would seem to be an absolute barrier to further obligated borrowing without any increase in property tax. Tax is now levied against the appraised value (now, for the first time, equivalent to the full, market, real, or cash value) of your property. To illustrate just how ludicrous this exercise has become, levies that once were in the neighborhood of one quarter or half a percent are now to be levied – and assessed by Rev and Tax – at seven eightieths of one percent on land and seven twentieths of one percent on buildings, the result of repeated manipulation of the tax structure over 10 years while avoiding increased tax levies.

This may seem a bit confusing to some. Most readers probably don’t really care about all this, but may when the full import hits home. Read about the nuts and bolts of that in an upcoming column.