Governor’s bi-partisan bill lifts tax exemptions on wholesale, banking, and insurance industries

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Governor Eddie Calvo has worked with Speaker B.J. Cruz and Senator Dennis Rodriguez Jr. To craft a bi-partisan compromise GMH modernization bill that would repeal tax exemptions for the wholesale, banking, and insurance industries instead of increasing the Business Privilege Tax or BPT’s for all businesses.

Guam – It appears that Governor Eddie Calvo and Speaker B.J. Cruz have found a solution to their impasse over the modernization of GMH.

The legislative speaker has refused to hold public hearings on two measures: bills 141 and 142, which introduced by the governor.  The legislation would raise the BPTs, also known as Gross Receipts Taxes or GRTs and borrow millions on the bond market to fund improvements at the island’s only public hospital. The speaker refused to raise taxes without voter approval and float another bond when GovGuam’s debt tops $1.2 billion.

The governor and speaker spent weeks trading barbs through a series of press releases. A hearse was parked outside of the legislature’s building as a political demonstration for several weeks.  Signs on the vehicle urged lawmakers to hold public hearings for both of the governor’s bills, but the legislature would not budge.

Now the governor has announced he has worked with both Speaker B.J. Cruz and Senator Dennis Rodriguez Jr. on crafting a bi-partisan compromise bill that does away with bond borrowing and tax hikes—and instead replaces them with the repeal of current tax exemptions.

Specifically, the bill would end the GRT exemptions granted to wholesalers, banks, hospitals and insurers. The measure says that by doing this, “GMH may be properly funded with an annual surplus remaining to pay the CIP’s whether new or modernized.”

In his press release the governor says GMH’s accreditation will be jeopardized without the appropriate funding. According to the governor’s office if passed, the bill would fully fund GMH “every-single-year moving forward, with a dedicated funding source.” The administration claims lifting these tax exemptions would also pay for the modernization of the hospital with critical renovations and medical upgrades.

“I want to thank Speaker BJ Cruz and Senator Dennis Rodriguez for their collaboration on this compromise measure. I anticipate and welcome the public discourse ahead on this very important community issue,” Governor Calvo said in the release.

Speaker B.J. Cruz issued a release of his own, saying in part, “I have always believed in the principle that no business should pay more until every business pays their fair share.”

Speaker Cruz adds bill is not the only difficult decision they will have to make this year, as they will also have to cut spending and find additional revenue.

READ GOVERNOR CALVO’S FULL RELEASE BELOW:

Hagatna – Governor Calvo has sent a compromise bill to the Legislature today, aimed at solving over 40 years of financial and facility challenges at the Guam Memorial Hospital Authority.

Unlike the Governor’s previous bill that proposed a .75% upward adjustment in BPT, the compromise measure proposes REMOVING TAX EXEMPTIONS spotlighted last month by both the Public Auditor and the Legislature.  It is a BIPARTISAN EFFORT drafted in collaboration with Speaker BJ Cruz and Health Chair Senator Dennis Rodriguez.

If passed into law, the bill IMPROVES HEALTHCARE ON GUAM by:

  1. Fully funding GMH, every-single-year moving forward, with a dedicated funding source;
  2. Modernizing the hospital with critical renovations and medical upgrades.

“Fixing GMH and improving healthcare for all Guamanians is a shared responsibility that requires participation by the administration, the Legislature and the community,” Governor Calvo stated.

Dr. Mike Cruz, President and Chief Operating Officer for Guam Regional Medical City, helped GMH gain accreditation during his tenure as lieutenant governor.

“The fact that GMH has to see every single patient who arrives at its doorstep, regardless of whether they can pay, is a problem that needs a dedicated source of funding to ensure that it meets its mandate. GMH is going to need to modernize, it’s an old facility that is falling apart as we speak, and that ultimately affects the ability for the staff and the physicians at GMH to be able to give care,” Dr. Mike Cruz said.

GMH Administrator PeterJohn Camacho added: “Because of these financial challenges, we are often faced with the choice of treating patients or maintaining facilities. The condition of our facilities makes evident that we have always chosen our patients first. These factors threaten accreditation immediately, but more importantly patient care.”

Dr. Larry Lizama said the hospital has made huge strides to ensure national standard of care is met but they need support.

“We have been vocal about our challenges!  The Hospital has a lot of needs to ensure safe patient care and accreditation standards.  The Modernization Initiative identifies critical solutions to our standardization of our healthcare delivery.  Our hospital serves our entire community.  They deserve the comfort that they are being cared for in a safe environment.  Appropriate support should be afforded the lives of our people,” Dr. Larry Lizama said.

Dr. Cruz, Dr. Lizama, Camacho and GMH Medical Director Vince Duenas are four of several healthcare professionals in the medical community, who, for the last several months, have spoken to Guamanians at village meetings, organizational gatherings, and social media videos on the challenges that GMH faces financially, as well as the solutions proposed in Bills 141 and 142.

“If we had the subsidy we had requested or if the solutions in Bills 141 & 142 had been passed into law, we wouldn’t be in this situation. Funding and financial stability are the underlying problem. We are pleased that a compromise has been introduced; the clock is running out; the time to act is now,” Camacho stated.

“This is our hospital. This is our hospital that is going to be here for us. It is the hospital where the majority of our people are born at, and it needs help. We need a modernization of GMH because it truly is a modernization of healthcare as a whole,” Dr. Mike Cruz said.

“I want to thank Speaker BJ Cruz and Senator Dennis Rodriguez for their collaboration on this compromise measure. I anticipate and welcome the public discourse ahead on this very important community issue,” the Governor stated.