GovGuam spending still outweighs collections - News: On Air. Online. On Demand.

GovGuam spending still outweighs collections

by Nick Delgado

Guam - The Office of Public Accountability has warned that continued overspending by the government will result in increased tax liability, which means residents continually getting their refunds late.  But the Calvo Administration believes it has a solution to put an end to that practice.  

"What we found was that in Fiscal Year 2011 they collected $363 million in income tax revenues and what's suppose to be set aside into the trust fund is $93 million, but what was actually paid was $50 million," explained Llewelyn Terlaje with the OPA. The latest audit from the agency shows that the government hasn't been following the law. Terlaje, the auditor in charge, says last year $93 million was supposed to be set aside for the sole purpose of paying past due tax refunds, but $41 million was instead used toward government payroll and other general fund obligations. 

Terlaje says it's all money that should have been deposited in the Income Tax Refund Efficient Payment Trust Fund, noting, "Whatever is set aside should be sitting in a bank account so that when tax filings happened April 15 they could process it right away.

Department of Administration director Benita Manglona said, "Our goal is when a tax payer files their return, in two weeks to a month they get their refund that's the goal of this administration." Asked if it is safe to say that should the Series 'B' bond go through, we won't see this type of audit again, she responded with "Yes".

Audit supervisor Rodalyn Marquez said, "If the government continues to operate in deficit spending bond, meaning one they are overestimating revenues more than what is coming in and to top it off they continue to overspend, the biggest concern is we are never really going to pay off the tax liability in its entirety." She pegged the government's deficit last fiscal year at $365 million, $278 million of that was a tax refund liability. 

Despite the payment of refunds earlier this month, she warns that if funds aren't identified soon, the liability will be $127 million by the end of the year. "Until the government is in a position where they can payoff past liabilities, become current and then set aside monies for future (revenue), we are always going to be in the situation where we are always going to have to dip into the trust fund or any other fund of the government," she said.

Manglona meanwhile says the issue should be resolved with the Series 'B' bonds, but stressed that GovGuam wouldn't be in this situation had lawmakers simply approved their first bond proposal to pay off all past due tax refunds in the first place. "We've been singing this same song with OPA since the beginning of this administration and that was the reason why the governor had to rescind the HAY increase," she said.

Ultimately, the public auditor recommended that GovGuam stop making incorrect revenue projections.



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