Rodriguez offers GMH modernization alternative after exchange between governor and speaker

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Senator Dennis Rodriguez Jr. is offering a compromise that he says will fund the modernization of of GMH without having to raise the GRT.

Guam – Speaker B.J. Cruz and Governor Eddie Calvo have been going back and forth over the Governor’s bill to raise GRT’s and borrow $125 million dollars on the bond market to fund the modernization of the Guam Memorial Hospital. Today, (Thurs.) Senator Dennis Rodriguez Jr. offered a compromise he hopes will break the stalemate.

Governor Calvo has been urging the legislative speaker to hold a public hearing for bills 141 and 142. The first measure would borrow $125 million dollars on the bond market to fund the modernization of GMH. Bill 142 would raise the Gross Receipts Tax or Business Privilege Tax from 4 percent to 4.75 percent to provide a repayment source for the proposed bond, and a dedicated subsidy to GMH.

Yesterday, (Weds.) Speaker Cruz wrote a letter to the governor saying that he would not hold a public hearing on the bond borrowing bill without voter approval of the proposed tax hike. The Speaker cited a Guam law that says all tax increases must be approved by a voter referendum.

The Governor responded to this by saying the Speaker should schedule a public hearing “on these important healthcare bills that have languished at the legislature since July,” allow a public hearing to listen to the input of the people before making a decision, and vote the bills up or down “without passing tough decisions on revenue enhancements back to the very people who elected you to make these tough decisions.”  The sentiments were made in a response letter from Governor Calvo, which also pointed out that Cruz has over the years personally authored and supported bills that increased sin taxes, property taxes, liquid fuel taxes and limited gaming taxes “without the consent of the public.”

This is something Speaker Cruz readily admits. In fact, he told PNC yesterday(Weds) that he is guilty of increasing taxes in this manner, but has now made it a point to begin letting the people of Guam vote on tax increases as prescribed by Guam law.  The Speaker issued a subsequent, short response to the Governor’s renewed push for him to hold a public hearing.

“With all due respect, and for the reasons I have already stated, my offer stands whenever you decide to take it,” Cruz wrote in this single-sentence letter.

Today, Senator Dennis Rodriguez Jr. chimed in with what he believes might be a suitable compromise. The senator issued a press release saying by ending “the industry exemptions on payment of the gross receipts tax” GovGuam could borrow the money necessary for the hospital without having to raise taxes to fund the bond payments. Senator Rodriguez says that the amount of money that will be generated “when certain industries begin paying their fair share of taxes is similar to the amount that would be raised if the GRT was raised to 4.75%.”

Rodriguez says one of the biggest pieces of criticism from the public was raising the GRT when other companies don’t pay any. Sen. Rodriguez says his office and the Governor’s fiscal team will work together over the next week to come up with a new piece of legislation that he believes will reach the necessary compromise that will allow for the overhaul and modernization of the hospital. Essentially the new bill will still allow the Governor to borrow $125 million dollars on the bond market for the hospital, but it will replace the tax hike section with language that will “swap out a GRT increase with the closure of exemptions on mature industries.”

Senator Rodriguez says that they will leave in exemptions for cottage or budding industries of small businesses.