Ahead of Governor Lou Leon Guerrero’s final State of the Island Address, lawmakers are already reviewing her Fiscal Year 2027 executive budget request, and a key disagreement is emerging over taxes and government spending.

The debate over Leon Guerrero's budget request has already begun. In her budget message, the governor called for long-term stability, fiscal discipline, and “honest budgeting” – while also proposing to keep Guam’s Business Privilege Tax at 4.5%. Her administration argues stable revenue is necessary to fund major obligations and avoid financial risk, but Legislative Committee on Finance & Government Operations chair Senator Christopher Dueñas says the law has already scheduled and accounted for the gradual 1% rollback of Guam’s BPT in the passing of the FY2026 budget law.

For Dueñas, maintaining the higher rate is unjustified, especially as recent oversight hearings of GovGuam agencies has shown that rather than a revenue problem, the government has a spending problem. He said,  “Agencies that have been coming before us for oversights have been demonstrating that they have tens of millions of dollars in lapsed funds.”

“The continued millions and millions in lapses has demonstrated that this government doesn’t have a funding problem, they have a prioritization problem as I see it from my perch.”

The administration also links keeping the tax rate to major projects, including building the new Simon Sanchez High School campus and Department of Corrections modernization. Dueñas says those commitments have also  already been funded in public law.

“We passed all of those obligations already," added the senator. "They’re already law. The $16.4M for Simon Sanchez, the $5M for the DOC project, the $35M for the hospital – those are already public law.”

And for the senator, the broader issue is economic balance, saying that as majority of our taxes come from the private sector, ensuring businesses have the ability to thrive is just as important as funding government operations.

“Government needs to be in-sync with the private sector and make sure we provide for balance, but we shouldn’t use the reason that we can’t fund these projects as a reason not to reduce the BPT and why the budget has to be $100 million more every fiscal year," he said.

What happens next will play out in two places: the governor’s State of the Island Address, where she is expected further discuss her EBR and maintaining the 4.5% Business Privilege Tax, and upcoming budget hearings, where senators will review government performance before casting their votes for the FY2027 budget law.