Morrison asks Guamanians to Help Stabilize Public Services

Mar.7.2018



FOR IMMEDIATE RELEASE

March 06, 2018

 

Morrison asks Guamanians to Help Stabilize Public Services    

Budget Cuts, Alone, aren’t Enough to Deal with $67 Million Shortfall; Public Services at Stake     

 

Senator Tommy Morrison continues to work with his colleagues and administration officials to address the $67 million FY 2018 budget shortfall resulting from the Tax Cut and Jobs Act which Congress approved in December of 2017. With several police and fire stations closed and additional cuts in services anticipated, 40 families impacted by the termination of Limited Term Appointments, GovGuam being placed on Credit Watch with negative implications by S&P Global Ratings, and GMHA consistently requesting for General Fund subsidies, Senator Morrison proposed separate amendments today approving either a 1% or 1.5% adjustment in the Business Privilege Tax rate – with an effective period as short as 6 months or up to 18 months. Bill 1(6-S), which is the measure currently before policymakers, proposes a 2% adjustment effective for 1 year but maintains a rate of 4.75% thereafter with additional taxes set aside exclusively for GMHA. A final amendment by Senator Morrison and Senator James Espaldon that would’ve reduced the governor’s suggested BPT adjustment rate of 6% to 5%, with an implementation period of one year effective March 15, 2018, failed. The proposal sought to implement a temporary solution to the budget shortfall and allow additional time for other cost containment and cost reduction measures to move forward.

 

Senator Morrison states “there have been many individuals including Mr. Carlos Camacho who have offered ideas and comments regarding the $67 million budget shortfall for this fiscal year. Mr. Camacho is a successful developer in the affordable and low-income housing industry and I’m sure he understands the challenges many of our working families continue to experience.

 

Although many of us have been focused on the impact this situation continues to have on public services, Mr. Camacho has also spoken about the benefits many families will realize by paying less taxes. Whether it’s a temporary adjustment to the Business Privilege Tax rate or implementation of a sales tax going forward, families will continue to benefit from most of the estimated $2,000 (or $1,500 for a combined annual income of $50,000 and a household of four) they now have as a result of the Tax Cut and Jobs Act of 2017. Using the USDA food plan which averages around $900 a month and applying a 2% temporary tax adjustment, which amounts to an additional $52 per month, a family would still have anywhere between $876 to $1,376 in tax benefits available for other expenses.

 

A temporary adjustment to the BPT and/or a new sales tax will impact a portion of the tax benefits families now have, and either proposal is a sensible approach to stabilizing government services in light of less revenue being remitted to the treasury to pay for public services.”

 

For additional information regarding this press release, please contact Senator Morrison’s office at 478-8669 or send an e-mail to tommy@senatormorrison.com.

 

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