When senators return to special session at 2 o'clock this afternoon they'll have more than just a proposal to raise the business privilege tax by 2% to discuss. Just this morning ratings company Standard and Poors announced that the Government of Guam's General Obligation and lease bond rating was placed on "Credit Watch" with negative implications.
"The CreditWatch placement reflects the government's disclosure that its cash flow will be extremely constrained over the next several months, and perhaps
even longer, and also reflects our view that the government's ability to meet its ongoing obligations could be impaired," said S&P Global Ratings credit
analyst Paul Dyson. The fiscal stress is due to an estimated $67 million decrease in general fund revenue for fiscal 2018 due to the effect of The Tax Cuts and Jobs Act of 2017, signed into law by President Trump on Dec. 22, 2017.
Over the past several weeks Senators have been in and out multiple special sessions called by Governor Eddie Calvo to address to looming financial crisis.
"If we don't receive evidence from Guam officials addressing these rating considerations, we will likely lower the ratings," a press release from S&P stated.