Lawmakers have spent the past three days combing through GovGuam's Fiscal Year 2026 budget plan – a process some are calling a “big, beautiful compromise”. However, with tax rollbacks, shrinking surpluses, and federal support drying up, senators and department heads question whether this budget is built for stability or for shortfalls. 

Resolving into the Committee of the Whole on Monday, the legislature entering “workshop mode” to scrutinize each line of Bill 44’s 160+ pages outlining the Government of Guam's plan for the next fiscal year.

Opening the Office of Finance & Budget's presentation, director Stephen Guerrero outlining how the budget’s revenue forecast was built – from tracking monthly collections and economic conditions to accounting for federal tax provisions, the state of tourism, and the military buildup.

“Since the beginning of FY'22," Guerrero detailed, " revenue collections in the general fund major categories exceeded projected revenues and has continued to exceed revenue projections for the past three years.”

Director of the Bureau of Budget Management & Research Lester Carlson, says that cushion is bolstered by millions in American Rescue Plan funds, set to expire next year.

Yet the FY'25 surplus is projected at just $56.7 million – a 62% drop from Fiscal '24’s $149.4M. Bill 44 also factors in the proposed rollback of the Business Privilege Tax from 5% to 4.5% - of which Guerrero says would result in a revenue loss of $41M.

Carlson cautions pulling such a large amount from the revenue stream, saying, “It is what it is. If you take $40M out of the revenue stream, you’re not going to be able to make everybody happy, especially when you’re doing things like making no provision for the rainy day [fund].”

Carlson says 87% of Guam’s over 13,000 small businesses already pay a reduced 3% rate — meaning the rollback benefits just 680 companies making over $2 million in annual revenue. The discussion turning to the One Big, Beautiful Bill, with Carlson noting that with impending tax deductions under the federal budget, our government’s revenue will be reduced by about $8M per year.

Senator Sabina Perez and Guam State Clearinghouse administrator Stephanie Flores warned of bigger risks, with the former commenting, “It lays out a tax cut when we don’t know the true impact it will have on the government.”

Flores added, “Everyday we worry about whether or not funds are going to continue to be available...if we reduce the BPT this year, are we going to be able to increase it next year when we need to?”

With amendments still ahead, lawmakers now face the task of deciding whether this compromise budget truly prepares Guam for the years ahead — or leaves the island exposed to deeper cuts.