Governor Lou Leon Guerrero is asking for at least one more fiscal year of having the business privilege tax pegged at 5 percent in order to gauge and stabilize the government of Guam’s finances.
The governor was reacting to Sen. James Moylan’s call for a compromise in balancing lower taxes with reduced GovGuam expenses. Moylan is the author of Bill 9-35, which seeks to roll back the BPT to 4 percent. The measure had a public hearing Tuesday and may be voted upon in the next legislative session.
But the governor, in an interview with Patti Arroyo on NewsTalk K57, said the compromise she wants is to have the 5 percent BPT for at least the end of fiscal year 2020.
She said it’s too early to roll back the 5 percent BPT because doing so would result in a budgetary deficit.
“Where do we get $58 million to make up for a rollback?” the governor asked.
She added that GovGuam’s budget request for the next fiscal year is the same as the previous one but it counted on revenues based on a 5 percent BPT.
If the BPT is rolled back, the governor said the budget will be unbalanced.
“So which services do we cut? Will we need to borrow again in the international bond market,” the governor asked.
The governor also said that more time is needed to study data such as jobs reports and the results of economic diversification efforts.