Tuesday, 09 May 2017

Gov's tax refund bill axed in special session

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The measure failed to pass garnering only seven votes in support, six voting nay, and two excused.  

Guam - After three days of nonstop hearings at the legislature, the governor’s bill for faster tax refunds was axed.

The measure failed to pass garnering only seven votes in support, six voting nay, and two excused.  

Today’s special session began with an opinion from legislative counsel on the contentious use of Section 30 monies to pay back tax refunds.

Attorney Julian Aguon highlighted several concerns with the use of the funding.

“In other words, if the FY2018 budget purports to appropriate monies already spoken for (and monies that figure as a material term of a contract entered into by GovGuam and relevant third parties over the TRAN authorized in Bill No. 1 (1­S)), then it may run afoul of the Contracts Clause,” he said, adding, “suffice it to say that there is at least some precedent on this issue that should heighten our caution with respect to enacting laws (arguably including a budget act) impairing contracts.”

Present to answer any and all queries from the legislative body was the Governor’s fiscal team, who appeared ready for another lengthy hearing.

Turns out, the special session only lasted a few hours, because it was revealed today that the baseline for the funding source was around $68 million, as opposed to the $120 million Governor Calvo reported from the Office of Insular Affairs.  

The news stemmed from correspondence between Congresswoman Madeleine Bordallo and the OIA. Bordallo inquired once and for all just how much federal funding there is in the Section 30 funds. In a statement to the media, Bordallo wrote:

 “The Office of Insular Affairs has indicted that the level of Section 30 funds attributable to fiscal year 2014 is $68,603,100, which is based on certifications from the Treasury Department. As I have stated on numerous occasions, I agree that fulfilling war claims should not come at the expense of Guam’s local treasury, but that our manamko’ deserve to be recognized and paid. This is why I have requested that the Trump Administration include funding for war claims in the President’s budget request. In February, I asked Governor Calvo to support this effort with President Trump so that Guam’s treasury is held harmless. I hope that we can stand as ‘One Guam’ in this effort, and my office and I stand ready to assist Governor Calvo and our Legislature in further clarifying any outstanding questions.”

But the news did not seem to deter the administration. More back-and-forth continued until ultimately, Senator Tom Ada, the Majority Leader moved for the bill to head for a vote.

Meanwhile, the Governor called out the six senators for killing the bill. They were:  Speaker BJ Cruz, Vice Speaker Therese Terlaje, Senator Tom Ada, Senator Regine Lee, Senator Mike San Nicolas, and Senator Mary Torres.

In a press release, the Governor wrote: “I am disappointed that the bill to pay tax refunds didn’t pass…I am saddened about what this means for those who are in dire need of their refunds.”

The Governor added that despite calls alongside the Congresswoman made to D.C., they were told the concerns were a “local” issue.  

Click on the attached documents for more. 

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