Camacho-Ada vows to roll back BPT, repeal property improvement tax
Updated: Oct 14, 2022
By Aurora Kohn
Former Gov. Felix Camacho vowed to roll back the business privilege tax from 5 percent to 4 percent and to eliminate the 100 percent tax on real estate with improvements valued at $1 million or more.
Camacho said condominium unit owners are subject to additional tax even if their individual units are worth less than $1 million.
“It is absolutely unfair and if there is legislation to repeal this law, we feel that it is absolutely necessary and we would support this,” Camacho said, noting that tax burdens stifle business activity and profitability.
Camacho and his running mate, Sen. Tony Ada, spoke at a virtual town hall meeting hosted by the Guam Association of Realtors on Thursday. Gov. Lou Leon Guerrero and Lt. Gov. Josh Tenorio were no-shows at the event.
Ada said the unintended consequences of the real estate tax could have been avoided had there been proper consultation with the stakeholders before the law was enacted.
The Republican team agreed that repealing the tax levy would reduce rental rates.
Ada also suggested exploring BPT exemptions for contractors and developers who build homes to lower the cost of construction.
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Besides the tax burdens, Camacho identified other barriers on the path to full recovery, including inefficient government services as exemplified by the arduous and protracted process of obtaining building permits and occupancy permits; the lack of affordable housing; the lack of access to health care; a failing educational system and the continuing state of public health emergency which restricts the system of checks and balances between the branches of government and keeps Guam in a “state of malaise.”
To avoid delays in obtaining building and occupancy permits, Ada stressed the need to make the one-stop center “real and effective.”
Ada suggested the adoption of a rule that automatically approves an application if it is not acted upon by the approving agency within a set number of days.
Camacho proposed establishing “standards of performance” for the permit reviews, including time limits.
He also said there should be separate procedures for “problematic applications and there should be solid justification for that, like a code violation.”
Camacho said “outsourcing the review of permits to qualified consulting firms" might be another possible solution.
The former governor said the “unreasonable” requirements by the State Historic Preservation Officer and the Guam Environmental Protection Agency can be avoided if “there are clear guidelines and consistency in the application of rules and regulations.”
He said it was just as important to examine the requirements and to repeal them if deemed unnecessary or outdated.
“We want to bring this mindset, this attitude of service to the government,” said Camacho, who served two terms as Guam’s seventh governor from 2003 to 2011.
Camacho said after two and a half years of the pandemic, GovGuam “is in a comatose state.”
“The private sector has been struggling, employees and organizations are living in different worlds. If you work for the government of Guam, you were told to go home, not come to work and you’re going to get your paycheck every two weeks,” Camacho said.
Ada said government agencies need to return to “normal operating hours so that our community can come back and start making a living again.”
“The longer they continue to hamper the ability of the private sector to get back to normal, that is going to continue to deplete the tax-based revenues of the government,” said Ada.
Camacho and Ada acknowledged that buying a home or building a home is a dream that is out of reach for most Guam families.
Camacho said there is a need to explore creative solutions such as obtaining a “substantially underserved trust areas” status that would allow Guam to obtain “infrastructure funding for wastewater and other utilities” and “other tools to finance improvements for our community” at low-interest rates.