Revenue estimates down for FY2011 - KUAM.com-KUAM News: On Air. Online. On Demand.

Revenue estimates down for FY2011

by Lannie Walker

Guam - While budget hearings have ended, the Committee on Appropriations today got an update on just what the government may have to spend in 2011 - which is significantly less than what was originally projected. Senators this morning were presented with a revised estimation of the amount of expected government revenues in Fiscal Year 2011.

Bureau of Budget and Management Research accountant Glen Diaz explains why the figures haven yet to change since the last estimation released in January, saying, "We had to make some adjustments from our original FY11 estimates due to delay in military and how make to work credit how that is being treated as a revenue."

Department of Administration Acting Director John Camacho says an audit report found these funds should not be counted as revenue, noting, "The work-to-pay credit is to give taxpayers a credit single $400, and filing jointly gives them $800."

The government receives $35 million per fiscal year for work to pay credits, according to Diaz.  But he added they had to back that figure out as a revenue source.  "We were treating it as the withholding, 'cause it was a reduction of withholding through the audit it was made it wasn't really income because of the reduction of rates and taxpayers are actually filing their returns and claiming the credit the government is actually losing money when they claim the credit," he said.

Diaz says they must wait for the Department of Revenue & Taxation to reconcile the figures before a solid number can be given.  

Another reason for the revision is the delay in the military buildup, with Camacho saying, "The more delay, the more revenue goes down.  Basic principles."

The bottom line: the estimate in revenue dropped by about $30 million from approximately $763 million down to about $733 million.  But Diaz adds the new estimation could still change.  He said, "This is just the most conservative revision, but it may go up because what is recognized as the it accounts for how make to work pay credit or estimated as make to work-to-pay credit in FY2011 represents, let's say, 8-10% of what was collected.  So that number should go up."

Diaz told lawmakers BBMR will continue tracking the figures through the fiscal year.

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