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Bipartisan Bill Would Fix Guam Roads With Fuel Tax Increase

Guam’s taxpayers can get better roads for less than the cost of a new tire--thanks to a new bipartisan proposal put forth by Senator Tommy A. Morrison and Speaker Benjamin J.F. Cruz. The just introduced Bill No. 122-34 (COR), provides an additional source of funding for village road construction projects on Guam by adding little more than one penny a year to the Liquid Fuels Tax for the next three years.

If the bill becomes law, the Liquid Fuel Tax would be raised in three annual increments beginning January of 2018—one and half cents the first year, an additional one and a half in 2019, and the remaining one cent in 2020. According to a 2013 study conducted by the University of Michigan Transportation Research Institute, the average person consumes 33 gallons of gas per month. With the highest cent increase at 1.5 cents under Morrison and Cruz’s proposal, the additional amount added to the Liquid Fuel Tax would cost taxpayers just 50 cents per month or $6 a year.

While Bill No. 122-34 (COR) would already provide the investment necessary for Guam’s roadways, the measure can be considered cost-effective, given the cost to drivers of replacing tires. This is often a recurring cost, given the deplorable conditions of village roads. Even the cheapest tire replacement can run up to $100 or $33 dollars over the next three years--nearly six times more than the annual increase proposed under Bill No. 122-34 (COR).

“Although I believe that adjusting the liquid fuel tax rates shouldn’t be the preferred solution, ensuring the safety of Guamanians on our roadways must be prioritized once and for all,” said Senator Morrison. “We can’t continue to ignore the dangerous conditions of our village streets – and the adverse impact years of inaction have on the health and safety of our families, schoolchildren, emergency personnel and others who use our roadways.”

Last established in 1983, Guam’s Liquid Fuel Tax and associated surcharge currently comprise half of all revenue in the Guam Highway Fund. Based on average collections for Diesel, Aviation, and Gasoline tax and revenue between Fiscal Years 2010-2016, every penny increase in the Liquid Fuels Tax should increase Guam Highway Revenues by nearly $1,000,000.

The bipartisan bill serves as a companion measure to Speaker Cruz’s $50 million bond borrowing bill (Bill No. 36-34)--a proposal which received significant support from key community stakeholders including Governor Calvo, who proposed adding four cents per gallon to the Liquid Fuel Tax during this year’s State of the Island Address. As a result, in a true show of bipartisanship, Bill No. 122-34 was crafted by the sponsors as separate legislation--ensuring adequate resources are met for road construction projects identified through Cruz’s measure.

“Working roads are essential to our island’s economic growth. They get us to work on time, move our food to the market, and keep our families from spending money on flat tires and wrecked suspensions,” said Speaker Cruz. “For just a few dollars a year, village roads will see the largest single investment in years. I thank Senator Morrison for his courage and I appreciate his willingness to work together.”

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