With the Income Tax Refund Efficient Payment Trust Fund short over $21 million, Senator Michael F.Q. San Nicolas informed Acting Director Christine Baleto in a letter that her confirmation hearing will not be conducted until she complies with the law.
Deposits into Tax Refund Account behind by $21.3 Million; San Nicolas Sends Letter to Department of Administration Acting Director Baleto
With the Income Tax Refund Efficient Payment Trust Fund short over $21 million, Senator Michael F.Q. San Nicolas informed Acting Director Christine Baleto in a letter that her confirmation hearing will not be conducted until she complies with the law. “In the 90 days that you have in your acting capacity, I want to afford you the opportunity to first make good on DOA’s obligation to comply with the law, so that your confirmation process can go as smoothly as possible,” he said in his letter to Baleto.
11 GCA Chapter 51 mandates that a certain percentage of the income tax must be deposited upon receipt into the Income Tax Refund Efficient Payment Trust Fund by the Department of Administration. This year that percentage is 25.6%. Based on the reported revenue for the first 4 months of FY 2016 (from October 2015 to January 2016), the required deposit should have been $37,455,280.12. Instead records show that only $16,062,576.79 has been deposited, for a shortfall of $21,392,703.33.
“The law is clear: 25 cents of every dollar collected in income tax should be set aside for tax refunds as it is received by DOA. That hasn’t been done and so now we find ourselves in a situation where no tax refunds for taxes filed this year have been released,” said Senator San Nicolas.
Records show that by this time in 2014, $14 million had been paid out in tax refunds filed that year. By this time in 2015, $3.1 million had been paid out in current year tax refunds. However last year, the administration blamed the slow pace on the property tax payment deadline being pushed back. This year, with the property tax deadline restored, GovGuam is behind even more.
Senator San Nicolas added in his letter, “I look forward to you using your cash management skills to prioritize tax refunds and get them out to our people as soon as possible. Your ability to bring the agency into compliance with the law – namely 11 GCA §51102- is key to making your position permanent. The late statesman Tony Blaz was held to this same expectation and delivered.”