The cuts, set to include another 8,000 government employees in two weeks, is aimed at saving money for the cash-strapped U.S. territorial government.

Members of Gov. Felix Camacho's staff, scores of directors and deputy directors and others were issued the lower paychecks on Friday. They also have had schedules reduced to 35 hours a week, so hourly pay will be unchanged.

The overall goal is to save the government $11 million by the end of the fiscal year, Sept. 30.

Camacho said the payroll cuts are needed to help address the island's worsening financial problems.

The governor said he was left with no choice after territorial lawmakers rejected his proposal to lift tax exemptions enjoyed by many businesses.

Camacho's administration has acknowledged spending $14 million above what was authorized for fiscal 2007.

The budget shortfall resulted partly from the government's failure to collect the projected $30 million that was expected from an amnesty program for those owing delinquent income and property taxes.

So far, less than $3 million has been collected through the amnesty program.

The Camacho administration, which has yet to submit its revised fiscal 2008 budget proposal to lawmakers, also is proposing a wide-range of tax increases to raise $48.5 million in additional revenue for fiscal 2008.

Shawn Gumataotao, the governor's spokesman, said the public shouldn't notice anything unusual after all the furloughs kick in.

"All of our agencies are going to be working to ensure that all critical services are being provided to our people," he said after the furlough's were announced.

Federal agencies that deal with public health, welfare and the environmental issues have warned that the local government could face a reduction in federal grants if federally paid employees' hours are reduced.

The governor's reduced-hours order does not include the Guam Public School System, University of Guam, the Guam Community College, the Office of the Attorney General, the Office of the Public Auditor or the Mayor's Council of Guam.

But the administration has said it would withhold 12.5 percent of those agencies' cash allotment for personnel. School officials are considering cost-saving measures to avoid cutting hours or running out of cash before the end of the fiscal year, including releasing up to 300 teachers this summer.

Guam is about 3,700 miles southwest of Hawai'i.

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