A bipartisan proposal introduced by Senator Mary Camacho Torres and co-sponsored by Senator Telena C. Nelson, Vice Speaker Tina Rose Muña Barnes, and Senator Amanda L. Shelton seeks to “cure” unemployment and reduce the business privilege tax.
If enacted, Bill No. 22-36 (COR) would gradually decrease the Business Privilege Tax (BPT) to 4.5% beginning October of this year and 4% in October 2022. During this time, one-quarter of one percent (0.25%) of the remaining four and one-half percent (4.5%) would be deposited into a newly-created Trust Fund for the sole purpose of building a reserve for unemployment insurance.
Guam is the only U.S. entity that does not have a local unemployment insurance program—an issue that was compounded by the global COVID-19 pandemic last year. According to a report published by the Guam Department of Labor in December of 2020, the number of individuals unemployed in Guam as of June 2020 totaled 12,890 while 48,920 individuals were labeled as those not in the labor force.
Given that the federally funded Pandemic Unemployment Assistance program may not last beyond the pandemic—financing a safety net for working families remains imperative moving forward.
As a result, the bill establishes a Commission on Unemployment Relief and Equity (CURE), composed of members of the government and business community, to begin the process of implementing a program under the federal-state Unemployment Insurance system. Under the bill, CURE would have until July of next year to propose rules and regulations for adoption.
“Bill 22 recognizes that a local safety net is long overdue, but the initial funding shouldn’t come at a cost to our ailing business community,” said Senator Torres. “By setting aside a portion of the funds businesses are already paying, this bill helps ensure a basic safety net for Guam’s working population in years to come.”
“As a community, we have all been affected by this pandemic and we have all learned that our families will need this lifeline without relying on federal funds,” said Senator Telena Cruz Nelson. “With this measure, we are investing in our people’s livelihoods during precarious times and we are coming together to truly Prioritize Our People.”
“Bill 22 will provide relief to our island’s businesses and establish a plan for the future,” said Senator Shelton. “We need to do everything we can to ensure that—come any disaster—our working families have the means to feed their children and pay their bills.”
“This bill proves you can lower taxes in a way that benefits workers, businesses, and the government at the same time. I thank Senator Torres for leading the charge to help companies struggling to stay afloat, and for employees whose livelihoods depend on a robust and sustainable safety net when jobs are lost or hours are cut,” concluded Vice Speaker Tina Rose Muña Barnes.