Government faces $48-million loss in revenue - KUAM.com-KUAM News: On Air. Online. On Demand.

Government faces $48-million loss in revenue

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The government is facing a 48-million dollar loss in revenue as a result of the recent Trump tax reforms.  And the impact to GovGuam says acting BBMR director Lester Carlson, “Absent some immediate action to replace some of those lost revenues there's gonna be a lot of pain with respect to personnel.”

In other words, layoffs.  But make no mistake, Carlson says cutting classified employees or reducing work hours is the worst case scenario- and civil service rules make it a difficult thing to do - But that's not the main reason argues Carlson. “I think its bad for the economy, I think its bad for businesses, I mean nobody wins. So what I'm saying is that its readily apparent that we need to initiate revenue enhancement measures quickly”, he states.

He says the budget bureau is working with line agencies on cost-cutting measures to meet targeted pro-rata reductions.  A hiring and travel freeze is already in place, and while Carlson could not provide an exact amount yet, so far agencies have only identified about 5-million they can cut. He contends that there's very little left to cut other than personnel, and that's something they want to avoid if at all possible.

“I'm holding out hope that we're not going to have to do that and that the revenue enhancements that we need to avert that situation come into play”, Carlson said.

It’s becoming clear that a tax hike is inevitable. The administration is hoping that lawmakers will agree to raise the business privilege tax from 4-percent to either 5 or 6.  That, agrees Carlson, will provide the quickest infusion of money which he says they need very soon.

A decision could come as early as next week, when the next financial meeting with the legislature is scheduled.

KUAM requested a detailed copy for each of the agencies proposed budget cuts. However, BBMR says it's a work in progress and they still need to meet with each agency.

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