Proposed measure would cut BPT in two phases
Sen. Mary C. Torres has proposed a two-phased rollback of the business privilege tax, offering an alternative to her Republican colleagues' bill seeking to cut BPT from 5 percent to 4 percent.
Besides the staggered reduction in BPT, Torres' Bill 22-36 would also tap the business tax to establish a safety net for Guam employees who lose their jobs.
"We need a forward-thinking approach to rolling back the BPT, " states a press release from the senator's office.
Bill 22-36 proposes to gradually decrease the BPT to 4.5 percent beginning October of this year and 4 percent in October 2022. During this time, one quarter of one percent (0.25 percent) of the remaining 4.5 percent would be deposited into a newly-created Trust Fund to build a reserve for unemployment insurance.
Guam does not have a local unemployment insurance program—a handicap that posed as a stumbling block to prompt distribution of the federal Pandemic Unemployment Assistance last year.
According to a report published by the Guam Department of Labor in December of 2020, the number of individuals unemployed in Guam as of June 2020 totaled 12,890 while 48,920 individuals were labeled as those not in the labor force.
The bill was co-authored by Democratic Sen. Telena C. Nelson, Vice Speaker Tina Rose Muña Barnes, and Sen. Amanda L. Shelton.
"Given that the federally funded Pandemic Unemployment Assistance program may not last beyond the pandemic—financing a safety net for working families remains imperative moving forward," states the press release from Torres' office. The bill would also establish a Commission on Unemployment Relief and Equity (CURE), composed of members of the government and business community, to begin the process of implementing a program under the federal-state Unemployment Insurance system. Under the bill, CURE would have until July of next year to propose rules and regulations for adoption. “Bill 22 recognizes that a local safety net is long overdue, but the initial funding shouldn’t come at a cost to our ailing business community,” Torres said. “By setting aside a portion of the funds businesses are already paying, this bill helps ensure a basic safety net for Guam’s working population in years to come.” “As a community, we have all been affected by this pandemic and we have all learned that our families will need this lifeline without relying on federal funds,” Nelson said. “With this measure, we are investing in our people’s livelihoods during precarious times and we are coming together to truly Prioritize Our People.” “Bill 22 will provide relief to our island’s businesses and establish a plan for the future,” said Senator Shelton. “We need to do everything we can to ensure that—come any disaster—our working families have the means to feed their children and pay their bills.” “This bill proves you can lower taxes in a way that benefits workers, businesses, and the government at the same time. I thank Senator Torres for leading the charge to help companies struggling to stay afloat, and for employees whose livelihoods depend on a robust and sustainable safety net when jobs are lost or hours are cut,” concluded Vice Speaker Tina Rose Muña Barnes.
Earlier this month, Sens. James C. Moylan, Vicente “Tony” A. Ada, Christopher M. Duenas, and Frank F. Blas Jr. proposed the BPT cut as part of the Republican caucus' Let's Get Guam Moving initiative.