Senators fail to pass budget for FY2019 - KUAM.com-KUAM News: On Air. Online. On Demand.

Senators fail to pass budget for FY2019

Posted: Aug 10, 2018 3:54 PM Updated:

After two weeks of debate and deliberation the legislature has rejected the Fiscal Year 2019 budget bill in a vote of 9-to-6. Lawmakers were struggling to bridge a $138 million dollar revenue shortfall created by the Trump tax reforms, and now they have to come up with a new spending plan.

Voting against the bill were senators Tom Ada, Frank Aguon, Jr., Wil Castro, Fernando Esteves, Tommy Morrison, Louise Muna, Dennis Rodriguez, Joe S. San Agustin and Therese Terlaje. Voting in favor were Benjamin Cruz, James Espaldon, Regine Biscoe Lee, Telena Nelson, Micahel San Nicolas and Mary Torres. Senators were seeking to balanced the budget with steep spending cuts, and tax increases to make up for the lost revenue from federal tax reforms.

They waffled over which taxes to raise, but settled on keeping the 5-percent business privilege tax, raising the real property tax for improvements of more than a million dollars, and bumping up the tobacco tax from $15 per 100 cigarettes to $20. Senators also went on a spending spree of $16 million in anticipated tax amnesty proceeds, but that money may not have really been available said Speaker Cruz during Thursday's session.

"Though we may have wanted to appropriate, depending on when this is signed, he could pay all the tax refunds before then and undermine all of the appropriations that we've gotten. And I would hope everybody understood that," he said.

The governor is on record saying any tax amnesty money should go to FY18 expenses and to deficit reduction. He's also likely to oppose another section that defunds all of his deputy director appointees. And Calvo also made clear in a past news conference that a controversial provision which guts the budgets of the governor's office, rev and tax, and the administration department and forces them to collect prior year past due taxes to fully fund operations, is an absolute non-starter.

"I'm not going to allow the ship of state to go into chaos. This alone is enough to cause chaos. You can't take out a Governor's Office, a Rev & Tax and a DOA. Everything else will follow," he said.

Failure to pass the bill means its back to the drawing board, with the new fiscal year looming on October 1.

Meanwhile, appropriations chairman BJ Cruz has stepped down as facilitator of the budget talks. He says the rejection of his bill is evidence of "no confidence." Vice Chair Frank Aguon Jr. wll take over his role.

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