Guam Republicans renew proposal for BPT cut, unveil economic recovery initiatives
Guam Republicans are renewing the recurring proposal to cut the business privilege tax from 5 percent to 4 percent as part of the incoming minority's "Let's Get Guam Moving" initiative.
BPT was raised from 4 percent to 5 percent in 2018 as part of the Calvo administration's strategy to make up for the revenue loss resulting President Trump's Tax Cuts and Jobs Act that dramatically cut taxes and eliminates certain tax breaks.
Persistent proposals to roll back the BPT have repeatedly fallen through in 35th Guam Legislature. Gov. Lou Leon Guerrero is opposed to the BPT cut, saying she prefers the 5 percent to remain in place "forever."
The new economic initiatives are proposed by Sen. James Moylan, along with incoming Republican senators, Vicente “Tony” Ada, Chris Duenas and Frank F. Blas Jr.
The 36th Guam Legislature will be inaugurated on Jan. 4. Republicans have secured seven seats during the last elections, thus taking the edge off the eight-member Democratic majority's clout.
Besides the BPT cut, the Republicans' initiative also proposes:
- A two-year suspension on the property tax increase for those improvements valued at $1,000,000 or more. The only exception to this legislation would be individual homes valued at more than one million dollars; and
- Raising the gross threshold of the limited BPT exemptions from $250,000 to $500,000.
"As the island embraces the economic realities of the new year, particularly with the conclusion of the federal Pandemic Unemployment Assistance (PUA) program on March 31, 2021, it is paramount that the 36th Guam Legislature prioritize policies which would provide support for businesses (primarily small businesses), who in turn would be able to bring more island residents back to work," a joint press statement from the Republicans said.
The Republican senators said proposals under their initiative will the first of several other pieces of legislation that will be introduced in the coming weeks when they took their seats.
"While federal support is always welcome, the local government must also do its part in this process," they said.
“The first step to get Guam moving is to create opportunities for businesses to bring back their employees and allow the spurring of the economy. This starts with proposals to help reduce their overhead expenditures, particularly government obligations. In return, the government benefits from the infusion of payroll taxes, along with disposable income spending.”
In a separate statement, senator-elect Joanne M. Brown expressed support for her colleagues' proposed initiative.
However, she added, "any initiative to ‘Get Guam Moving’ will require more than just the ideas of a few. It will require cross-sector collaboration with all three branches of government and leaders from our private sectors. That being said, I am open and interested in learning more about Senator Moylan’s plan to ‘Get Guam Moving.’”
Brown also vowed to tackle "the irregularities in processes and procedures that exist today in the government of Guam."
"I remain focused on tackling corruption and following-up on questions raised by auditing officials, and the community at large, about the current administration’s lack of controls on CARES Act expenditures and the like. These irregularities only demonstrate that, without transparent and accountable process, procedures and proper management practices, seeds of mistrust can be easily sown."