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  • By Pacific Island Times News Staff

Calvo mulls government revamp

Saying “the crisis isn’t over,” Gov. Eddie B. Calvo said will meet with senators to discuss reorganization to create a streamlined and more efficient government. “That’s not going to be an easy task but I know we can do it,” Calvo said in his weekly address Monday.

Calvo on Friday signed into law a bill that would raise the business privilege tax from 4 percent to 5 percent and implement a 2 percent sales tax beginning Oct. 1. These taxes are projected to raise additional revenue that would help the government bridge the funding gap created by the federal tax cuts.

“It’s with a sigh of relief that we saw Bill 248 pass at the legislature on Thursday,” the governor said.

He said the administration’s fiscal team is reviewing the measure with all of its amendments.

“After months of debate and sharing information, we finally have a roadmap and something to help us bridge the $67 million shortfall caused by changes in the federal tax policy,” Calvo said.

The governor thanked the senators “who understood the gravity of the situation we face because contrary to what some people have said, and continue to say, this situation was not fabricated.”

However, Calvo said, the fiscal crisis did not end with the passage of the BPT tax hike and sales tax law.

“In fact, we still have some tough times ahead of us,” he said, adding that the administration has volunteered a 32-hour work week that is expected to last until next month.

“In the next few days, we’ll take our current financial state and look at what will be coming – cash wise – to see if furloughs are still necessary,” Calvo said. “This is what we warned senators of, the longer we delay in passing revenue enhancement legislation the tougher it would be to get back on our feet.”

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