Calvo wants ‘emergency’ temp business tax increase to fix D.C. cuts

February 13, 2018

Guam governor's last State of the Territory address accuses

Washington  of setting local economy back

 

    Guam’s Republican governor in an era in which a Republican president and a Republican-controlled Congress are in charge in Washington, D.C., delivered his final State of the Territory address sounding more like an angry American founding father inveighing against Britain’s King George III, even invoking the theme of “taxation without representation” against the U.S.  federal government.

 

   The source of  Calvo’s ire is the growing realization that the much ballyhooed Trump $1.5 trillion tax cuts figure to blow an immediate $48 million plus hole in Guam’s budget. Calvo did not mention Trump’s name, but he heaped blame on Washington for persistently setting back the island’s economy, citing a variety of causes ranging from the venerable Jones Act to a wide range of unfunded  mandates and Washington imposed limitations on H2 workers.  

 

  “It has been, for decades, a litany of federal mandates imposed on the people of this island.  In our endeavor to advance this island into economic independence and prosperity, you see the parallels in the relationship between the American colonies and the British – and sadly, the relationship between the United States and its colony called the Territory of Guam, “ said Calvo, who said elsewhere in the address that he wants a Guam ‘decolonization’ vote on the island’s political status.

 

   Calvo cited a long litany of accomplishments during his nearly eight year administration, but got his biggest applause from the audience on the subject of paying back long overdue tax refunds:

 

  “To date, we have put more than $1.3 billion in tax refunds into your pockets. And we’re returning your money to you within months because your administration exercises smart financial management. We are paying out more tax refunds in history, we’re also doing it at a savings in interest. Additionally, we’ve paid out more EITC than any other administration, at about $350 million in the last seven years. “

 

  But how is Guam to compensate for Trump’s gigantic tax cut, which Calvo described as a stimulus, but others characterize as a blatant giveaway to the rich?

 

  “The immediate impact to the government is a loss in revenue…. we’re looking at a potential $48 million less in collections this fiscal year. IF we do nothing, it could mean paydays without a paycheck for GovGuam employees sometime next month. This will "bleed" into the rest of the community, negatively affecting local businesses and economy.  And it will hurt many families. These aren’t just numbers, these are people.”

 

  “We’re standing on a precipice created by outsiders,” Calvo said.

 

  Calvo proposed a 2  percent temporary increase in the Business Privilege Tax (BPT) as a temporary fix to both Gov-Guam and Guam Memorial Hospital finances.

 

  “After a 24-month sunset period, we would leave .75 percent in place as a dedicated funding source to fully fund our hospital every year moving forward, and putting closure to this 40 year failed cycle. Our community and our children deserve the best possible healthcare in the future, and our hospital’s employees deserve the resources and facilities to do their job — not the blame.”

 

  Calvo said that he will be sending a bill to the Guam Legislature as early as Wednesday laying out this plan.

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