Govguam has already used $16 million dollars from this fiscal years revenues to pay tax refunds for last fiscal year.
Guam – Senator Mike San Nicolas says GovGuam is falling behind in paying tax refunds again.
Govguam has already used $16 million dollars from this fiscal years revenues to pay tax refunds for last fiscal year. It’s a trend that could put the government back into the position it was before GovGuam borrowed hundreds of millions of dollars on the bond market to pay past due taxes. “You cannot borrow your way out of a spending problem and we’re seeing that starting to manifest itself today,” said Senator San Nicolas.
Back in 2011 Governor Eddie Calvo pushed for and got legislative authorization to borrow about $200 million dollars to pay out tax refunds. Then in 2012 another $100 million was borrowed for tax refunds. The idea was that this would allow GovGuam to pay off prior years tax refunds so GovGuam could start with a blank slate and begin paying it’s refunds in a timely manner.
However now GovGuam seems to be slipping behind with refund payments again. In fact the Government used $16 million dollars from this fiscal year’s collections which are supposed to pay for this fiscal year’s tax refunds to instead pay the prior year’s tax refunds. “Sadly what happens is money comes in and it’s used to catch up,” said Senator San Nicolas adding, “The trends are very alarming and until we get our spending habits under control we’re going to continue to trend downwards in those priority areas.”
In 2014 at this time in the fiscal year $14 million in tax refunds had already been paid. In 2015 at this time in the fiscal year $3 million had been paid out. To date no tax refunds have been paid out for this fiscal year. $2.1 million in tax refunds were paid out last week but they were for the prior fiscal year’s tax refunds.
“It looks like the Department of Administration is behind by about $21 million dollars today in deposits into the tax refund trust account and that’s where they’re supposed to get money to pay tax refunds,” said San Nicolas. The Senator says based on the reported revenues for the first four months of this fiscal year there should have been $37.4 million dollars deposited into the tax refund trust account but only $16 million was deposited. This means that $21 million still needs to be deposited into the account. Because of this the Senator has written the newly appointed acting director of DOA Christine Baleto telling her that he will withhold her nomination until the right amount of money is deposited into the tax refund trust account.
In addition to the $21 million that is owed to the tax refund trust account the $16 million that was put in the account was then used to pay tax refunds for the prior fiscal year and not this fiscal year. Technically if GovGuam were following the law and if they weren’t behind in paying out tax refunds they should have been able to pay out $37 million in tax refunds by now.