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"Fiscally & financially irresponsible"

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by Mindy Aguon

Guam - Calling it "fiscally and financially irresponsible" and "completely unnecessary", the Calvo Administration's fiscal policy team expressed their strong opposition to Bill 140, which was recently amended by Finance and Taxation Committee chair Senator Ben Pangelinan. On Friday members of the fiscal policy team from Rev & Tax had expected to discuss their position on the bill before the Committee of the Whole, but were instead informed that they didn't need to. 

After hearing that lawmakers were told  they supported the bill, the fiscal policy team held a press conference this afternoon vehemently opposing the legislation that is currently in the voting file. The bill seeks to make paying tax refunds a priority.  Aside from concerns that it could negatively impact the government's credit rating that was recently affirmed, DOA Deputy Finance Administrator Kathy Kakigi says if passed GovGuam workers would undoubtedly be impacted.

She said, "By imposing this mandated set aside for tax refunds averaging $8-$9 million a month, you guys have to tell me - what do you want? Do you want to furlough employees because at the end of the day? That's what it's going to boil down to."

The Guam Economic Development Authority chimed in as well saying the bill even foresees the cash shortfall it will create by authorizing the governor to obtain a line of credit up to $10 million to pay for operations - all of which GEDA administrator Karl Pangelinan says could impact the government's bond rating.

He noted, "It ties the hands of the government unnecessarily, we don't feel that there's a need to legislate this type of move and again I talked about the implications that this has with regard to our ratings agencies as well as our bond holders and that's one of the primary reasons why us and GEDA are opposed to it."

The fiscal policy team stressed that the legislation would take $8 million to $9 million that would pay operational obligations to pay refunds. Instead, they've asked lawmakers to oppose the bill and instead focus on the governor's biennial budget and plans to obtain a $344 million bond later in the year.

Bill 140 sits in the voting file.

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