by Ken Quintanilla

Guam - By this time next week, about $60 million in tax refunds for 2011 should be sent in the mail to island residents. And while the Department of Administration and the Department of Revenue & Taxation prepare for next week's distribution, there's still some lingering issues from refunds that haven't been claimed since last year to how we move forward with paying the rest.

Governor Eddie Calvo's fiscal team successfully sold the $108.7 million Series 'B' bond at a new record low interest rate. And while the bond proceeds are set to be closed by June 6, a lot of work is still being done to ensure all goes smoothly. Today DOA and Rev & Tax met to work out logistics with how to move forward in mailing out the checks once the bond closes.

Rev & Tax director John Camacho says there's an estimated $105 million total for 2011 tax refunds, so they are running the numbers to figure out how interest applies and to determine the cutoff date of who will be getting their refunds from the $60 million. "Because there's going to be some interest included in this payout because of the law requires if we don't get out refunds within 45 days from the date filed we must pay interest," he explained.

Camacho estimates its likely those that filed by mid-March will get a tax refund with about 21,000checks set to be distributed out of a total 36,000 returns that were processed; however, no definitive date has been finalized.

Department of Administration director Benita Manglona meanwhile understands that the other half of 2011 tax refunds need to be paid, which is why the Calvo Administration has worked on fiscal stability in order to address the cumulative deficit for prior years. "We know that is still owed and we just have find ways to streamline the government so we can pay the tax refunds in a timely manner," she said.

She adds DOA has started setting aside $33 million for next year's tax refunds as required by law but are far from reaching the estimated total $100 million. However, Governor Calvo says the law prevents them from using it for tax refunds that are currently owed.

Governor Calvo says he will be requesting the Guam Legislature to amend the law in order to pay for old tax refunds that are owed now to bring the amount to $93 million closer to what is owed. "But the current law says we have to build this reserve for the 2012 tax refunds and how we can only pay a portion of what's owed for 2011 and still accumulate funds for refunds that are not even owed yet. So with that, we see this as illogical," the chief executive said.

And while we wait for the governor to send the request to the Legislature and Rev & Tax and DOA continue preparing for next week, KUAM News has confirmed confirms there's still millions of dollars in refunds waiting to be claimed from last year. Said Manglona, "As of April 30 bank reconciliations, it's showing we still have $4.2 million in unclaimed tax refunds that are sitting at DOA."

She says the tax refunds are undeliverable as the recipients of the unclaimed checks have either moved away or gave wrong addresses. People should call DOA to find out if they have a check there, if not claimed, it will go straight to the government but it should take about 5-7 years to do so.

Manglona says staff will begin stuffing envelopes starting on Monday. In addition to the $60 million in tax refunds, the bond will fully satisfy GovGuam's obligations to the Retirement Fund estimates at $25.1 million and approximately $18 million in health insurance payments and for other purposes.