Speaker's Weekly Radio Address - August 17 - KUAM.com-KUAM News: On Air. Online. On Demand.

Speaker's Weekly Radio Address - August 17

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Weekly Address by Senator Ben Pangelinan
(in place of Speaker Judi Won Pat)

Over the past eight months, the people of Guam have had to suffer through the lowest income tax refund payout in several years. As of the most recent reports from the Department of Administration, the Calvo Administration is delinquent by over $38 million in income tax refunds that were initially budgeted this fiscal year.  Our Governor continues to talk to us on the TV, through the radio and in the newspaper about his desire to come current with our tax refunds by December without a guarantee that he will end the vicious cycle of borrowing our tax refunds In fact, we have no commitment to pay income tax refunds or any transparent plans or evidence of reducing the cost to run our Government..

Our Governor's plan to borrow money is dependent on the Legislature raising the current debt ceiling. By $100 million dollars.  Nobody's talking about that. During these uncertain times, our Governor's request to increase our credit limit does nothing to reduce unemployment, increase wages, fix our hospital or guarantee our teachers and students have adequate facilities and class sizes.  All the promise of a campaign. In fact, our Governor's proposal to borrow is nothing more than a transfer of wealth from the lower and middle class to the rich and powerful because it reduces future government budgets by more that $25 million dollars a year.  So while we struggle as a community to insure that our hospital is safe, and our schools are adequately funded, Wall Street investors will be paid interest from money that we are using today to run the hospital and pay our teachers. Two years ago, the Legislature set the policy course to fix the monopoly in the Government Health Insurance program by increasing competition.  I am pleased to report to you today that the policy was successful this year. 

The government of Guam successfully negotiated an $11 million dollar decrease in the current health insurance contract.  That is $11 million dollars that can now be used to improve the health and welfare of our community.

The $11 million negotiated savings is a real tangible example of a successful plan where the Legislature set the course to fix a problem and the negotiating team of the Government of Guam executed the plan to make the it a reality.  

The Legislature is being asked to approve a plan that is short on details and solutions.  The current plan only seeks to divide our community by stirring up the anger of all of us who are unjustly owed tax refunds.  The current borrowing plan by our Governor does not guarantee that the $25 million dollars used today to pay the salaries of doctors and nurses at GMH and teachers at DOE will be available after we commit to paying that money to the rich and powerful institutional investors on Wall Street.   

The Guam Legislature Committee on Appropriations has continually requested the full details regarding the Governor's ever-changing bond proposal. We have had many meetings over the past weeks asking for those details. The Committee has yet to be presented with all the information necessary to perform a thorough and comprehensive analysis to really see if the government of Guam can afford the bond, without having to continue to borrow from tax refunds in the future. I have always been a staunch advocate for the paying of tax refunds. Just this past year, I introduced Bill 140, the Pay Income Tax Refunds First Act of 2011, which would have surely had a tax refund check in the pockets of the people of Guam this fiscal year. Unfortunately, rather than make a commitment to pay current tax refunds, our Governor chose to divide the community by telling you to lobby senators against this plan.

It is these instances and experiences that require us as public officials to be transparent about what raising our credit limit and then borrowing all the way up to that limit really means.  I suspect that maxing out our credit card so to speak will require that taxes are increased or that at least 1000 government workers may have to be layed off.   As a community, we need to grapple with the idea of reducing future budgets by $25 million dollars.  We need to grapple with paying more taxes or adding 1000 people to the unemployment statistics.  Rather than make a uniformed knee jerk decision on our Governor's borrowing proposal, I prefer that my colleague and I experience a commitment to real management of the finances of the government of Guam so that we can be current on the already budgeted and mandated to be paid tax refund payments moving forward.

The Guam Legislature held its first budget session yesterday to introduce Substitute Bill 145, which includes provisions that will guarantee the payment of tax refunds by not pledging Gross Receipts Taxes to the rich and powerful institutional bondholders, but rather, pledges it to tax payers who are owed refunds. The "Guaranteed Payment of Income Tax Refund Payment System," as introduced in the substituted bill, adds on to existing statute that requires that our Governor to deposit into the Income Tax Refund Efficient Payment Trust Fund, the amount of income tax owed, commensurate with revenue collections. Disappointingly, these deposits at the proper rate have not been done this fiscal year. This measure will assure tax payers are paid from a dedicated funding source.

As I have always championed, tax refunds should be paid back to the tax payers of Guam. It is our Governor that is not following the law and paying out the refunds as budgeted by the Legislature, even commensurate with collections. He also intends on under-budgeting the payment of refunds going forward, in order to balance his budget as part of his plan to take out the largest bond borrowing initiative in the history of Guam. We must all be cognizant of the issues that face our government that will affect generational equity on this island. As promised, a promised refund check for you this year may prove to be unpaid tax refund checks for your grandchildren years from now.

On behalf of the Guam Legislature, Si Yu'us Ma'åse'.

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