VIDEO: GEDA Board Approves Q.C. Tax Break for GRMC’s Private Hospital

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Guam – Despite some of the criticism by the Guam Medical Association the Guam Economic Development board approved the Qualifying Certificate for the Guam Regional Medical City’s new private hospital.

GRMC CEO Margaret Bengzon spoke to the GEDA board this afternoon in a last minute push to get the qualifying certificate that would grant them tax breaks. Bengzon told the board that there’s an opportunity for growth in the guam health care market as guam’s population growth is outpacing the us mainland and the population is aging. Older people are more prone to chronic diseases which require more specialists. Meanwhile Bengzon says Guam has about half the number of nurses and about a third of the number of doctors that the U.S. mainland has on average “So what happens when you have a vacuum is that people leave. Every year we estimate that about 15 thousand people $65 million dollars leaves island for health care,” said Bengzon. The GRMC CEO says the new hospital will helf fill this healthcare vacuum and will help to keep patients who go off-island for healthcare, on Guam. They will bring an additional 130 beds and 270 thousand sq. feet of hospital and Bengzon says they will take MIP patients. “We will take MIP weather the regulators require it or not because that’s in our DNA. We see healthcare as an opportunity to do both well and good and we want to do both the well and good on Guam and with the qualifying certificate as proposed by the credit committee we will be able to do that,” said Bengzon.

The GEDA credit review committee recommended approval of the Q.C. specifically they recommended a 70% corporate income tax rebate for 20 years, 75% corporate dividend tax rebate for 5 years and a 100% real property tax abatement for 10 years. GEDA’s key reasons for this reccomendation are the new medical services that would not come here without GRMC’s investment, the tax breaks that will pay for those who cannot pay for health care, the boost it will give to Guam’s credibility as an area to invest in and the $420 million in new tax revenues that Guam would otherwise not be collecting.

Also the GRMC will be paying direct community contributions that will be used to fund MIP, higher education and other things as determined by the GEDA board. This contribution was originally set at 10 percent per year but the board recommended a specific dollar figure that would increase incrementally over the next 20 years. “$500 thousand year one stay within $750 for year two go to a million from 3-5 and then $1.2 from 5-10 and then $1.4 from on out,” said GEDA board member David John as he a proposed a motion to approve the Q.C. with the caveat that specifica ammounts be required for community contributions. The board eventually approved the motion and approved the entire Q.C. “All in favor of that motion…aye…okay the motion is passed it allows our administrator to proceed with finalizing the documents and signing on the Q.C.,” said GEDA board chairman E.J. Calvo. The Q.C. will now go the A.G. for review before going to the Governor’s office for final approval.