Muna-Barnes to Calvo: Borrowing Instead of Investing Is the Wrong Way Forward

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Guam – Senator Tina Muna-Barnes, the Chair of the Legislature’s Tourism and Municipal Affairs Committee, is critical of Governor Eddie Calvo’s decision to borrow money to pay tax refunds.

The letter was written in response to the Governor’s Weekly Radio Address today [Monday]  in which the Governor re-iterated his intentions to issue a bond and borrow money to pay all tax refunds in full.

In her letter to the Governor, Senator Muna-Barnes writes that she does not agree that GovGuam should “borrow our way to economic recovery.” And she argues thatGovernment cannot eliminate debt by handing our grandchildren a larger deficit.”

Borrowing instead of investing is the wrong way forward,” writes the Senator saying If our economy is to achieve long-term viability, borrowing must end and economic investment must begin.”

As an alternative, Muna-Barnes suggests that the Governor only borrow to provide more staffing to the Guam Department of Rev & Tax concluding that: “By leaving DRT enforcement and collection positions vacant, we create an imbalance that forces those who pay taxes to perpetually subsidize those who do not at an increasingly greater cost.”

Read Senator Tina Muna-Barnes’ letter to Governor Calvo below:

Dear Governor Calvo,

Hafa Adai!  I wholeheartedly support your effort to stay in touch with the people of Guam.  I believe the village visits that you will begin today in Dededo are a positive step in the right direction.

Since your administration began about three months ago, many of your public statements have focused on ending “the cruel cycle of poverty.”  I believe as you do that poverty in Guam must end and that tax returns rightfully belong to the people who paid them.  However, I do not agree with your contention that we should borrow our way to economic recovery.  Poverty is considered a “cycle” because it is immune to quick fixes and it perpetuates itself.  The only true way to shatter the cycle is to create jobs and the qualified workforce to fill the positions.  Government cannot eliminate debt by handing our grandchildren a larger deficit.  Borrowing instead of investing is the wrong way forward and the temporary high our economy will receive from meeting our tax liabilities may feel good for a moment, but it will not end poverty nor will it strengthen our economy in the years to come.

If our economy is to achieve long-term viability, borrowing must end and economic investment must begin.  I am sure you know that many of Guam’s families are struggling with the crippling cost of gasoline and though we must create more jobs in the future, perhaps we can begin by ensuring that working people can afford to get to work.  By investing in a reliable public transit system based on the best private sector practices, I believe Guam’s economy will see increased stability, stronger inner-island commerce, and a significant savings to the working-class.

Finally, I ask that you consider borrowing that permanently ends the continued understaffing at the Department of Revenue and Taxation (“DRT”).  As the deadline for tax filing approaches, I cannot help but contemplate the loss in tax dollars we experience because DRT lacks the needed personnel.  By leaving DRT enforcement and collection positions vacant, we create an imbalance that forces those who pay taxes to perpetually subsidize those who do not at an increasingly greater cost.

Sinseru yan magåhet,
Senator Tina Rose Muña-Barne