Senator James Moylan has reacted to Gov. Lou Leon Guerrero’s call to retain the business privilege tax at 5 percent, saying discussions should at least be held on a timeline for lowering the tax and reducing the expenses of GovGuam.
“We are a bit surprised that the decision of the governor is to retain the 5% BPT versus wanting to work with lawmakers on setting timelines on when we can start balancing a lower BPT with reduced expenses,” Moylan informed PNC News.
“We understand that this will be a challenge, which is why we waited six months after introducing the measure to provide both Adelup and the legislature ample time to assess the finances,” he added.
Moylan is the author of Bill 9-35, which seeks to roll back the BPT to 4 percent. The measure had a public hearing Tuesday and may be voted upon in the next legislative session.
The governor had asked the senators to maintain the 5 percent business privilege tax, at least temporarily, until GovGuam can stabilize its finances, adding that investors in Guam’s recently sold Layon bonds had made that a precondition to buying the Guam bonds.
But Moylan said the increase in BPT has also affected businesses on island as well as consumers and the cost of goods.
“We don’t want to hinder our financial picture with the bond market, but at the same time we can’t sit idle and do nothing about the issue either. The cost of goods on island, the economic stability for small businesses, and job creation are critical issues, and the BPT is one aspect that directly correlates with these all of these concerns,” Moylan said.
He added: “Whether the tax reduction can take place this October, next October or in 2021, let’s at least place the discussion on the table. The people spending at the local cash registers deserve that much.”
According to Moylan, one of the common sentiments that were aired during the public hearing on Bill 9 last Tuesday was that although the community was asked by the government to pay more in BPT taxes, there was no discernible improvement in public services.
“These taxes were typically passed on at the cash registers starting in 2018. But instead of seeing improved roads, schools or fiscal government policies, we are seeing increased salaries in public sector management and what seems to be a larger government with positions previously vacated, now being filled. This adds to the communities’ inability to have confidence in their government,” Moylan said.
He added: “The first step to rebuilding this confidence is by working between branches and coming up with a fiscal plan with long term benefits for the people. That’s all we are asking, and I don’t believe it is asking for too much.”
##
