Governor Lou Leon Guerrero told the Guam Chamber of Commerce today that she has no choice but to maintain the current business privilege tax despite calls from the business sector to roll back the tax.
She pointed out that it was her predecessor, former governor Eddie Calvo, who advocated for a 1% increase in the BPT.
“I am here before you today to say, we have to maintain the present level of BPT. Every day I look at our government’s cash report. With the 1% increase in BPT in fiscal year 2019, we were able to generate an additional $77.8 million. But we’re still $8 million short,” Leon Guerrero said.
The governor stressed that her administration has identified areas where they could cut budgets without decreasing services.
“We cut our budget by $67 million over the last three fiscal years. Today, we spend less of your tax dollars running this government than my predecessor. We cut our deficit in half from $83 million to $47 million in just one fiscal year. Paying liabilities that have been on the books for decades, we increased our collections in fiscal year 2019 by $27 million above adopted revenues and brought tax evaders to the Attorney General, totaling $5.9 million,” Leon Guerrero said.
But the governor said the economic devastation caused by the pandemic further exacerbated GovGuam’s normal revenue stream.
“We are in a serious crisis. And it requires me as your governor to not just look at the bottom line. It requires me to continue to provide a social safety net for people without sacrificing a person’s dignity to a decent job. If we reduce the BPT, we can’t expect to maintain the current levels of government services. We cannot help your business grow, care for the sick, keep your family safe and maintain quality education, if we reduce the BPT,” Leon Guerrero stressed.
The governor did point out that there is a new administration in Washington and that the Biden administration may very well review and reverse the Trump tax cuts.
If that happens, the governor said she would be willing to roll back Guam’s business privilege tax.