What does Supreme Court ruling mean for future tax refunds? - KUAM.com-KUAM News: On Air. Online. On Demand.

What does Supreme Court ruling mean for future tax refunds?

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by Ken Quintanilla

Guam - It was late Tuesday afternoon when the Supreme Court issued a declaratory judgment on the Legislature's case against the governor over the tax refund account. The judgment found that the governor cannot withdraw or transfer funds from the trust fund to pay general fund obligations. What does this mean for tax refunds moving forward?

Governor Eddie Calvo's director of communications Troy Torres says all things considered, he's not surprised by the Supreme Court's ruling in the Legislature's case against the Administration, saying, "We're not surprised, we'll continue paying tax refunds on time and this court judgment does nothing to deter the governor from that commitment."

The Democrats in the Legislature filed its case back in February and Tuesday the Supreme Court found that the governor may not withdraw or transfer funds from the trust fund to pay General Fund obligations, even if the withdrawn funds are deemed to be advances from the trust fund that are repaid at a later date. "That is just very fancy language recognizing that the governor used the general fund to pay tax refunds and when the time came because he used the General Fund to give a loan to the tax refund account, he needed to reimburse the General Fund for making those payments what the court is saying now, is you can't do that, you can't reimburse the General Fund you can't take any money out of the trust fund even if the General Fund advanced all of that money to pay tax refunds faster which is to us, a ridiculous piece of legislation if the goal is to pay tax refunds faster," he said.

The court in the meantime declined to address or engage in a factual inquiry to determine whether the governor violated the law which Torres says is recognition that tax refunds are being paid on time and faster they've ever been paid in history adding it's probably why the court didn't say to pay back the money into the trust fund. Senator Ben Pangelinan meanwhile issued a release saying this is a "landmark declaratory judgment opinion, the first in over a decade and will once and for all prevent this governor and all future governors from taking from the people's tax refund trust fund that (he) had envisioned and created to protect the people from financial misuse."

"So Senator Pangelinan has passed lots of laws in the 20 years that he has been a senator and in those 20 years despite all those laws that he's passed, tax refunds were withheld from the people for four to five years at a time so that tells me that all of Pangelinan's laws were absolutely useless in the payment of tax refunds," he stated.

So what does this declaratory judgment mean for tax refunds moving forward?

"Is it going to slow down the payment of tax refunds? I don't think so because the governor is absolutely committed to paying tax refunds and he'll do whatever it takes to do it and that is within the law the court is now saying it's not within the law to reimburse the general fund, so be it, we'll just find another way to do it," Torres said.

One of those ways is what Torres says is the "magic" of the fiscal team in handling better cash flow and better cash management. Torres further tells KUAM that he has received notice from the fiscal team that another batch of refunds is being processed right now. As for how much and how many, he wouldn't confirm adding they won't be making any more announcements as they'll be paid as money comes in. 

We should note the governor's director of communications Troy Torres has confirmed that the amount is $6 million in tax refunds that will be mailed out on Friday.

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