by Mindy Aguon
Guam - The Calvo Administration's plans to borrow $387 million would solely go to pay past due income tax refunds and no other obligations of the government that have gone unpaid. Representatives from the Guam Economic Development Authority gave a presentation to lawmakers 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 en Pangelinan said, "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. But GEDA officials reassured them that it wouldn't have a negative impact. The Administration is hoping to go to the bond market in the next two months in hopes to have tax refunds paid before Christmas, but lawmakers are still scrutinizing the restructuring proposal.