by Mindy Aguon
Guam - The Calvo Administration's plans to borrow $387 million that would solely go to pay past due income tax refunds and not other obligations of the government that have gone unpaid. Representatives from the Guam Economic Development Authority gave a presentation to lawmakers this afternoon on the financing plans and the costs associated with obtaining that money on the bond market.
GEDA Business Development Manager Lester Carlson explained that of the $387 million the Administration intends to borrow, $280 million would be used to pay unpaid tax refunds while the remainder of the money would go to pay interest. Senator Ben Pangelinan asked, "There's no other past due obligations such as COLA, such as prior year obligations, that will be funded from this borrowing, is that correct?", to which Carlson replied. ""No, not from this scenario."
Lawmakers also expressed concerns about the impact the proposed borrowing would have on the government's credit rating and had concerns that GovGuam would be borrowing to pay the interest on the restructuring of the bonds. Concerns were also raised about why money would need to be set aside for American Reinvestment and Recovery Act-related expenses, something GEDA officials said they would research.