Governor vetoes Guam's 2027 budget bill, submits new proposal

By Pacific Island Times News Staff

Gov. Lou Leon Guerrero today vetoed the fiscal 2027 general appropriations act and trasmitted a revised version, noting that the Republican measure cuts government revenues without providing cushions for affected services.

According to the governor's office, the new budget proposal retains the legislature’s 4 percent business privilege tax rate while restoring  funding  for

 healthcare,  public safety, child care and other critical government services through identified replacement revenues.

“The issue before us is not whether the business privilege tax should be 4 percent or 4.5 percent,” the governor said. “The issue is whether we will responsibly fund the services the people of Guam depend upon. Our revised budget proves we can do both.”

Lou Leon Guerrero

Substitute Bill 266-38, the Fiscal Year 2027 General Appropriations Act, which the 38th Guam Legislature passed by a vote of 8-6, pegs the government of Guam's budget at $1.4 billion, approximately $46 million lower than the governor’s original request.

Sen. Christopher M. Dueñas, the bill's author, has desribed Substitute Bill 266-38, "a disciplined and accountable spending plan that lowers the tax burden on local businesses while prioritizing education, healthcare, public safety, tourism recovery and performance-based budgeting."

“When government revenues are reduced without replacing them, essential services are inevitably reduced as well,” the governor said. “The legislature’s budget  made that choice. Our revised budget makes a different one.”

According to a press release from the governor's office, the new executive proposal incorporates "updated revenue projections recognizing approximately $18 million in additional recurring corporate income tax collections to restore essential appropriations while maintaining a balanced budget."

The revised budget appropriates $7.63 million from unobligated fiscal 2026

 general fund revenues to ensure Child Care and Development Fund subsidies remain available throughout fiscal 2027.

The governor's office said the proposed allotment for child care is separate from Bill 1 (9-S), which seeks $7.5 million to bridge the current fiscal year's shortfall in child care funds. The legislature has put off action on the supplemental appropriation requested by the governor, saying her bill was riddled with inconsistencies.

"Even if that measure is enacted, additional funding is still necessary to sustain the program through FY2027," the governor's office said.

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Sen. Shawn Gumataotao said he was disappointed by the governor's veto of the budget bill.

"She noted at the start of our process that the proposal was 'unreasonable and unacceptable.' If she waited for budget talks to be completed, she would have witnessed something more unreasonable and unacceptable," the Republican senator.

Gumataotao noted that, during the budget deliberation, four Democrats criticized the administration's bloated spending, while two others "struggled to stay in line, amenable to common sense compromise."

"Legacy will be defined by scrutiny. History will ultimately be the judge of this Governor who chose pride over statesmanship at a time when our people are demanding better of their government," Gumataotao said.

Supporting the governor's veto, Sen. William A. Parkinson urged the legislature to immediately begin bipartisan negotiations on a responsible compromise that protects essential public services.

“This veto gives us an opportunity to correct course,” Parkinson said. “These Republican budget cuts represent healthcare for a sick child, support for a person with a disability, treatment for someone in crisis, protection for an abused youth, and the police officers, firefighters, and corrections officers responsible for keeping our community safe.”

To expedite consideration of the revised proposal,  the governor will 

convene the legislature into special session.

“Our responsibility is not simply to pass a budget,” the governor said. “It is to adopt one that protects public safety, healthcare child care and

 the services our families depend upon while preserving Guam’s long-term fiscal stability.”

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