Guam governor vetoes 2026 budget bill, hopes to sway Republicans to reconsider business privilege tax cut

 By Mar-Vic Cagurangan

Gov. Lou Leon Guerrero’s collision course with the 38^th Guam Legislature escalated Friday following her veto of the $1.36 billion budget act for fiscal 2026, which she said has misguided priorities and is based on an incoherent policy.

Transmitting an alternate budget bill, the governor gears up for a high-stakes negotiation with the Republican-led legislature over the business privilege tax, one of the most contentious items in Bill 44-38.

If signed into law, the governor warned, the budget measure could create “potentially dangerous shortfalls.”

Bill 44-38 includes a provision that cuts BPT from 5 percent to 4.5 percent effective Oct. 1, and then to 4 percent by Oct. 1, 2026, which would result in a $40 million reduction in tax revenue.

Bill 44-38 was passed by an 11-4 vote. The legislature needs 10 votes to override the veto.

While expressing confidence that her veto would withstand an override, the governor is attempting another gambit with her substitute bill. It calls for keeping BPT at 5 percent, resulting in the retention of $40 million in revenue, which she wants earmarked for Guam Memorial Hospital.

 “Now, our legislature must choose: Support GMH for all of us or secure a tax giveaway for the favored few,” the governor said in her video message.

She called on the senators to “pass this substitute budget immediately. Make it law—let’s just help GMH, too.”

The legislature held a special session on Friday upon the governor’s request, but went into recess eight minutes after it started.

Speaker Frank Blas Jr. ruled to table the discussion on the governor’s proposed substitute until Sept. 10 to “give members of the legislature enough time to review the bill.”

Smarting from another legislative snub, the governor slammed the legislature “for recessing yet again, instead of acting on her compromise budget proposal.”

“In the last two weeks, the Republican majority have shown us that the ‘R’ in Republican clearly stands for ‘recess,’” the governor said.

In her veto message, Leon Guerrero lambasted the legislature for what she called “lack of coherent fiscal policy or understanding.”

She pointed out that the legislature itself has sought a declaration of emergency at GMH, following a fire at the pediatric ward in August.

“All while the budget they passed gave the hospital less money than it has in the current year. Less money in a time of crisis,” she said.

Sen. Christopher Duenas, chairman of the government operations and finance committee, said that while the governor and the legislature agree that GMH is in crisis, “the differences lie in the strategy to achieve long-term stability.”

“We are committed to urging a swift override of the governor’s veto and to moving forward with more frequent, purposeful legislative oversight to ensure issues like this are never ignored, as they were under the previous legislative majority,” he said.

Chris Duenas

Duenas defended the legislature's actions, arguing that they have consistently provided supplemental funding to keep essential hospital services running.

"What we cannot accept is weaponizing GMH for political gain or using it to extort the legislature,” Duenas said. “Leaders who change or ignore laws for political advantage undermine democracy.”

Duenas noted that GMH has lingering problems that warrant sustainable solutions and accountability.

“For example, roughly $10 million in ARP funds intended for GMH was lost due to poor oversight. Raising the BPT alone cannot fix management issues,” said Duenas, who proposed the amendment for a two-tiered BPT cut.

Stressing that the BPT rollback was long overdue, Duenas noted that the tax rate remained at 5 percent for eight years without adequately funding GMH.

Leon Guerrero, however, alleged that the BPT rollback was the Republican senators’ attempt at returning a political favor.

“They cannot renege on their promise to scratch the backs of their

 campaign donors through the reward of a BPI rollback,” the governor said. 

Shawn Gumataotao

“And they cannot admit to our people that the BPT rollback, which is a boon to wealthy businesses that are not suffering, is more important to them than the hospital, which serves all of us," she added.

Sen. Shawn Gumataotao described the governor’s budget veto as “disappointing.”

“For eight months, members of the legislative majority and I have been in lockstep with her administration on so many issues facing the people of Guam,” said Gumataotao, the leading proponent of the BPT rollback.

He argued that Bill 44-38 “is a responsible spending plan that gives the governor the resources and flexibility she needs to effectively manage the resources of the executive branch for the next 12 months.”

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