Governor to veto sales tax repeal bill - KUAM.com-KUAM News: On Air. Online. On Demand.

Governor to veto sales tax repeal bill

Posted: Jul 11, 2018 3:52 PM Updated:

The Governor says he will veto the sales tax repeal bill, and is hopeful senators will change their minds to avert a fiscal crisis. But the measure passed by an overwhelming 11-to-4 margin, more than enough for an override if the vote holds steady.

The governor is still pushing for the sales tax which was supposed to go into effect October 1st to provide some permanent funding for the hospital and education department. "We're hopeful that we can continue to move in the direction and continue with the current law that's in place," Governor Eddie Calvo stated.

But that may be wishful thinking given the veto proof, 11-vote margin. Calvo says there's no need to repeal the sales tax because he has the finances are under control from the GRT hike and tax amnesty proceeds, and $30 million in cost-cutting.

"Right now things are stable on this island. It will be them that drives this bus over the cliff if they override my veto," he added. He warns of an up to $160 million shortfall if the sales tax isn't replaced with some other "revenue enhancements." 

Speaker Benjamin J. Cruz has set a hearing for Monday on two such bills, saying, "I will support any legislation that will number 1,  provide stability to our hospital and to our education system. Number 2, ensure that critical public services are provided to the people of Guam in health, safety and education."

What he won't support is using tax amnesty proceeds for emergency funding for GMH to address deficiencies that threaten accreditation and Medicaid and Medicare funding.

He said, "They're doing some piecemeal type of solutions but all they are piecemeal, and once that amnesty money is spent, what happens for next year the hospital's still going to have a $30 million shortfall."

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