Guam – Deputy Rev & Tax Director Marie Benito is accusing Senator Ben Pangelinan of making “untrue statement” to lawmakers during Monday’s session regarding his Bill 140, the “Pay Tax Refunds 1st Act” that was voted down by lawmakers today [Tuesday].
A release from Benito states the following:
The Department of Revenue and Taxation reviewed proceedings from legislative session Monday, when senators were discussing Bill No. 140. The department is concerned by untrue statements Sen. Ben Pangelinan made to other senators during the quick discussion on this fiscally-irresponsible measure, which could jeopardize government workers, services and any chance for the full payment of tax refunds.
The department, after the public hearing and before the legislative session, offered written testimony to Sen. Pangelinan’s budget committee opposing the senator’s bill. It is our understanding that this is the protocol in submitting written testimony, and that the committee would provide this testimony to other senators.
We discovered, however, that other senators were not provided this testimony, and had not reviewed it when the bill went up for discussion on the session floor. The senators were not given adequate time to review critical testimony from the financial agencies of the government. This concerned our department and prompted our public plea for senators to consider how dangerous this legislation is to the solvency of the government, and the livelihood of its employees and their families. The bill, which purports to put tax refunds at the forefront of cash payments, actually will have the reverse effect. It is, quite simply, a real threat to the Governor’s proposal to float a bond and pay all tax refunds in full by Christmas.
Transcript of False Information
Fortunately, Sen. Frank Blas, Jr. pointed out that the budget committee’s mandatory report of the public input of Bill No. 140 that was online did not contain testimony from our department or the Bureau of Budget and Management Research. The senator asked whether our department, along with BBMR, submitted testimony on Bill No. 140. The transcript of Sen. Blas’ request follows:
“I have a couple of questions. Hopefully, the author can yield to the questions, and I’ll present the questions before giving him the opportunity. I do have the committee report from online and the previous speaker had alluded to, um, a testimony submitted by (Department of) Revenue and (Taxation). On the committee report online, there was only a testimony submitted by GEDA. Was there other testimony from Revenue and Tax and BBMR?”
Sen. Pangelinan responded, “Yes, there was testimony from Rev & Tax,” and went on to state that the testimony was not included because it was not submitted before the committee report was completed.
Sen. Blas then wanted time to read the testimony and ask questions afterward, to which Sen. Pangelinan quickly remarked:
Sen. Blas – “I’m going to read the testimony. Thank you very much, Madam Speaker. If there’s any question and I’m still, after reading the testimony, can I then be allowed to ask questions based on testimony that was provided?”
Response from Sen. Pangelinan – “Uh, just for the, point of information. The testimony submitted by RevTax was on the original bill. The substitute bill, I had a chance to talk to RevTax this morning, and they looked at it, and they have less of a problem with regards to this bill than the original bill, uh, and, um they just want to be able to make the decisions, so.” [Emphasis added]
This is not true. None of the managers of the Department of Revenue and Taxation ever saw the substitute Bill No. 140 until much later that afternoon. Upon reviewing the substitute bill, we again affirmed our opposition to it.
We are concerned the other 14 senators were misinformed of our position. We are further concerned these senators would not know the true impact this dangerous proposal will have on all past-due tax refunds and the jobs of government workers. The false information Sen. Pangelinan presented about our position may have affected other senators’ positions on this bill.
We understand Sen. Pangelinan has asked for a reconsideration of the vote that failed today. We urge senators to unite against its passage. Its passage into law will cause major negative consequences on government workers, tax refunds, bond ratings, the solvency of the government and its ability to operate services.
Department of Administration acting Director Benita Manglona also provided testimony, which was not provided in the online committee report. We provide a key excerpt from the testimony to demonstrate the negative consequences of this bill’s passage:
“As demonstrated by the cash challenges the government has had to deal with on an ongoing basis, it would be gravely detrimental to the government’s operations to impose a mandated payment of the tax refunds. This would mean nonpayment of debt service, payless paydays for teachers, police, firemen, other line agencies, UOG, GCC, the Judiciary, non-profit organization vendors, and the inability to meet unfunded court mandates, just to name a few. The Department of Administration is the agency responsible for generating the report on the cash flow condition of the General Fund. It has provided valuable information to support judicious decision-making in the cash balancing act. We have been able to manage the cash flow for the past 4 months with no critical services being jeopardized. We are requesting for your support to have confidence in the administration’s ability to manage the limited cash resources of the government without threatening critical and essential government services. Again, administration believes strongly in the importance of paying tax refunds to our hardworking taxpayers, which is exactly why I ask for your support in the authorization to issue a $344M “Revenue Anticipation Financing Bond” for the payment of those very same tax refunds.”