San Nicolas set to find funds after override

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Congressman Michael San Nicolas has urged the Guam Legislature to include language in the GovGuam FY 2020 budget to protect healthcare appropriations.

“The Trump Tax Cuts that brought us to this point are also supposed to be stimulative. So what kind of growth can we project into the budget? How much more business investment can we look forward to, to also increase the tax base by the investment activities that are going to generate more economic activities?”

Guam – Sales tax repeal author Sen. Michael San Nicolas (D) appeared focused and self-assured after this morning’s 11-4 override of Gov. Eddie Calvo’s sales tax repeal veto. This, even though that means the two percent October 1 sales tax is gone, and senators will now have to cuts costs or name new revenue to bridge an FY19 shortfall estimated at $145 million.

Official proceedings lasted all of seven minutes this morning. The emergency session’s agenda was cleared for one item and one item only in legislative chambers: the vote to override or sustain Gov. Calvo’s Friday veto of Bill 262-34 (COR), the sales tax repeal legislation, authored by Sen. San Nicolas.

“Mr. Speaker, notwithstanding the house rules, I move to waive session agenda items eight through 13,” Sen. Tom Ada said, making way for roll call.

“On that motion, hearing no objection,” Speaker BJ Cruz said, opening the floor for the vote.

Perhaps because the forthcoming outcome was already crystal clear, no one had been especially hurried to start right at the 9:00 o’clock, as scheduled.  Friendly colleagues had gathered for the big vote on an all-but-assured override. So, after taking a little time to catch up with one another, the formal vote was on.

After eleven ayes, two passes each by Cruz and Sen. Louise Muna (R), and firm nays from Sens. Wil Castro (R) and Tommy Morrison (R), the final tally was 11 for the override, 4 against. The ayes had it.

“Vetoed Bill No. 262-34 (COR), notwithstanding the veto of the Magalahen Guahan (Governor), is overridden.”

And, with that, the highly anticipated override was set in stone. No new sales tax on consumer goods and services, come this October. San Nicolas’s sales tax repeal bill has proven every bit as veto-proof as the headlines have been reporting. Bill 262 first passed with 11 votes on July 2. And it passed again today with the same 11 votes, by the same 11 senators. Only Castro, Cruz, Morrison and Muna still voted nay, as they had early this month.

“The Magalahen Guahan, in his letter regarding the veto of Bill 262-34 regarded it as the most self-serving and irresponsible bill that had ever been passed by any legislature,” San Nicolas said to colleagues still gathered in chamber following the vote. “Let the record reflect that today is the most significant override in the history of this administration, based on his own standards.”

The Calvo Administration soon shot back:

“Today, 11 senators stripped away a funding source that would have ensured continuity of government services for the people of Guam in Fiscal Year 2019 — 10 weeks from now. This is the second time these 11 senators left the Guam Memorial Hospital and Dept. of Education out to dry.”  —Office of the Governor

Wasting no time, San Nicolas has already begun identifying sources of revenue that he’s confident will close the gap—citing unbudgeted Compact Impact funding, the administration’s recent tax amnesty program which collected $33 million in two months without penalties or interest, and other unpaid taxes.

“We also have another example of a large company here on the island that just recently filed a whole bunch of tobacco taxes that they weren’t paying,” San Nicolas said to PNC after adjournment.

“So until this administration puts things like Compact Impact on the table, and more aggressive collections on the table, and factors those things into the budget, it’s premature for us to raise taxes.

“The Trump Tax Cuts that brought us to this point are also supposed to be stimulative. So what kind of growth can we project into the budget? How much more business investment can we look forward to, to also increase the tax base by the investment activities that are going to generate more economic activities?”

Whether they choose to raise other taxes, slash spending, or even seek and discover unforeseen sources of new revenue to balance Fiscal Year ’19, one thing’s for certain. With about five months before sine die, Senators of the 34th have their work cut out for them.