DRT targeting taxes from military contracts
Monday, 15 February 2010 05:15
by Therese Hart | Variety News Staff
THE Department of Revenue and Taxation has laws and regulations in place for companies doing business on Guam and those contracted on U.S. military installations and it is the department’s responsibility to make sure that all these companies are paying their taxes on island, tax director Art Ilagan said.
Contractors who do business on Guam are required to register with the Guam Contractor’s License Board and they must obtain clearances from DRT which would include the Collections Branch to make sure they do not have any unpaid taxes, said Ilagan in a letter to Speaker Judi Won Pat.
Ilagan said companies will not get clearance until all taxes are paid in full or they have entered into a payment installment agreement.
In a Jan. 20 memorandum, President Barack Obama directed the Internal Revenue Service to conduct a review of certifications of non-delinquency in taxes that companies bidding for federal contracts are required to submit pursuant to a 2008 amendment to the Federal Acquisition Regulation.
No info
The memo noted that too often federal contracting officials do not have the most basic information they need to make informed judgments about whether a company trying to win a federal contract is delinquent in paying its taxes.
Obama indicated that the federal government pays more than half a trillion dollars a year to contractors, yet reports by the Government Accountability Office state that federal contracts are awarded to tens of thousands of companies with serious tax delinquencies.
The total amount in unpaid taxes owed by these contracting companies is estimated to be more than $5 billion.
Ilagan said the federal government will go after off-island prime contractors. However, DRT foresees a problem of tracking subcontractors who do business on base.
Subcontracts
“Once they get the federal contract, they then subcontract out here on Guam to local contractors. We just have to control it here when the subcontractors get the contracts from the prime contractors. We have to track the subcontractors and even that is kinda hard to track. How do we know these subcontractors aren’t doing business on base?” said Ilagan.
Contractors who transact business solely on U.S. military installations on Guam are required to obtain a service license. They also are also require to obtain the necessary clearances with DRT which would include clearance from Collections Branch.
Ilagan said the Collections Branch is hard at work investigating these off-island companies with a service license to do business on military installations to make sure they are in compliance with the business privilege tax laws on Guam.
Daunting task
“It is a daunting task considering that for fiscal years 2008 and 2009, there were 649 and 644 contractors, respectively, listed on the federal government spending website for Guam alone,” Ilagan stated in a letter to Won Pat.
This list is a combination of local and off-island companies who either have a business license, contractor’s license or service license, Ilagan said.
Vice speaker B.J. Cruz is also concerned about Guam not being able to capture all local taxes owed by companies who will do business on Guam because of the military buildup.
Cruz has asked Congresswoman Madeleine Z. Bordallo to include language in the 2012 National Defense Authorization Act which would require that each construction contract to designate Guam as the originating site and that all associated income be designated possession source income without any special exemption.
Cruz also asked that the Department of Defense be specifically required to cooperate with tax officials on Guam.
Bordallo responded that she would consider Cruz’s request.
Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
Tuesday, February 16, 2010
Sen B J Cruz with Ray Gibson
Sen B J Cruz with Ray Gibson
Interview between Ray Gibson and Senator B J Cruz about his suggestions to Congress Woman Bordallo on how Guam can collect tax revenues from companies doing work on the military bases during the military buildup. They also talked about the Draft EIS compilation procedures. They then talked about the wave for Bill 185. They ended their discussion by talking about US Senator Jim Webb. click here to download the entire podcast.
http://www.pacificnewscenter.com/images/stories/k57podcasts/feb10/100210_0746334.mp3
Interview between Ray Gibson and Senator B J Cruz about his suggestions to Congress Woman Bordallo on how Guam can collect tax revenues from companies doing work on the military bases during the military buildup. They also talked about the Draft EIS compilation procedures. They then talked about the wave for Bill 185. They ended their discussion by talking about US Senator Jim Webb. click here to download the entire podcast.
http://www.pacificnewscenter.com/images/stories/k57podcasts/feb10/100210_0746334.mp3
Saturday, February 13, 2010
Cruz: Guam must enjoy revenue perks
Cruz: Guam must enjoy revenue perks
Wednesday, 10 February 2010 04:08
by Therese Hart | Variety News Staff
VICE speaker BJ seeks reassurances from the U.S. Congress that Guam will reap the maximum amount of local tax revenues to be generated by the military buildup from federal contractors.
He is also soliciting the assistance of Congresswoman Madeleine Z. Bordallo.
Cruz forwarded several letters to Bordallo relaying his concerns about the government of Guam’s ability to collect buildup related tax revenues and asked for special language in the 2012 National Defense Authorization Act to support Guam’s tax collection efforts.
Cruz is requesting that language be secured in the federal budget act that would require each federal construction contract to designate Guam as the designated place of origin and that all associated income related to the buildup, including corporate bonuses, be designated possession source income, without any special exemption and that Department of Defense cooperates with local tax officials.
Cruz said there are many issues concerning the process of collecting corporate and individual income taxes and particularly taxable income related to projects for corporations and individuals who file outside Guam.
Cruz pointed out that in May last year, Secretary of the Navy B.J. Penn indicated that at the local level, the government of Guam is responsible for collecting local tax revenues.
“It is only fair that steps be taken at the federal level ensuring that the windfall from the contracts related to this buildup enjoy the full scrutiny of local tax enforcement,” said the vice speaker.
In response to Cruz, Bordallo wrote that she would keep his suggestion for legislation in mind as she begins proposals for inclusion in the 2011 National Defense Authorization Act.
However, Bordallo said she will await the results of the report from the Department of Defense before she takes further action. She believes that the report will assist her in developing more accurate and comprehensive legislation.
Wednesday, 10 February 2010 04:08
by Therese Hart | Variety News Staff
VICE speaker BJ seeks reassurances from the U.S. Congress that Guam will reap the maximum amount of local tax revenues to be generated by the military buildup from federal contractors.
He is also soliciting the assistance of Congresswoman Madeleine Z. Bordallo.
Cruz forwarded several letters to Bordallo relaying his concerns about the government of Guam’s ability to collect buildup related tax revenues and asked for special language in the 2012 National Defense Authorization Act to support Guam’s tax collection efforts.
Cruz is requesting that language be secured in the federal budget act that would require each federal construction contract to designate Guam as the designated place of origin and that all associated income related to the buildup, including corporate bonuses, be designated possession source income, without any special exemption and that Department of Defense cooperates with local tax officials.
Cruz said there are many issues concerning the process of collecting corporate and individual income taxes and particularly taxable income related to projects for corporations and individuals who file outside Guam.
Cruz pointed out that in May last year, Secretary of the Navy B.J. Penn indicated that at the local level, the government of Guam is responsible for collecting local tax revenues.
“It is only fair that steps be taken at the federal level ensuring that the windfall from the contracts related to this buildup enjoy the full scrutiny of local tax enforcement,” said the vice speaker.
In response to Cruz, Bordallo wrote that she would keep his suggestion for legislation in mind as she begins proposals for inclusion in the 2011 National Defense Authorization Act.
However, Bordallo said she will await the results of the report from the Department of Defense before she takes further action. She believes that the report will assist her in developing more accurate and comprehensive legislation.
Friday, February 12, 2010
Cruz calls upon Bordallo for more involvement
Cruz calls upon Bordallo for more involvement
Posted: Feb 09, 2010 2:58 PM
Updated: Feb 09, 2010 5:50 PM
by Nick Delgado
Guam - Vice-Speaker B.J. Cruz says he would like to see Guam Delegate Madeleine Bordallo do more when it comes to insisting Department of Defense contractors pay their fair share of taxes when performing work on Guam for the buildup. The senator says a response he received from Bordallo assuring him that provisions are already in place in the National Defense Authorization Act aren't good enough.
Cruz said the provisions only require DOD to report the steps it is taking to ensure contractors are complying with local tax and licensing requirements.
He said, "I want everybody's salaries in the $15 billion paid out of here and funneled through our banks. I don't want it through banks in the States; I want everything sitting in Guam."
Cruz says it does not require the DOD to cooperate with local officials nor to actually pay taxes locally.
Posted: Feb 09, 2010 2:58 PM
Updated: Feb 09, 2010 5:50 PM
by Nick Delgado
Guam - Vice-Speaker B.J. Cruz says he would like to see Guam Delegate Madeleine Bordallo do more when it comes to insisting Department of Defense contractors pay their fair share of taxes when performing work on Guam for the buildup. The senator says a response he received from Bordallo assuring him that provisions are already in place in the National Defense Authorization Act aren't good enough.
Cruz said the provisions only require DOD to report the steps it is taking to ensure contractors are complying with local tax and licensing requirements.
He said, "I want everybody's salaries in the $15 billion paid out of here and funneled through our banks. I don't want it through banks in the States; I want everything sitting in Guam."
Cruz says it does not require the DOD to cooperate with local officials nor to actually pay taxes locally.
UOG Economics Professor Says Benefits Of Buildup Overstated in DEIS
UOG Economics Professor Says Benefits Of Buildup Overstated in DEIS
Monday, 08 February 2010
Guam - A University of Guam professor of economics is saying that the Draft Environmental Impact Statement for the Guam military buildup is inaccurately estimating the economic boost that the buildup will bring Guam. According to Dr. Claret Ruane the DEIS estimates are overstating the buildup's economic impacts.
University of Guam professor of economics Dr. Claret Ruane says that the DEIS is borrowing a formula from Hawaii to calculate the economic benefits of the Guam Military Buildup.
According to Dr. Ruane it all boils down to what's called the multiplier effect. Basically it's a formula used by economists to determine how much money will circulate through an economy. Dr. Ruane says the DEIS does this by multiplying every dollar brought into Guam from the buildup and multiplying it by 1.89. 1.89 is the same figure that Hawaii uses to determine the multiplier effect.
Dr. Ruane feels that the Guam multiplier is much less. She thinks Guam should be using a multiplier of 1.5 but just for arguments sake she based her first analysis on a multiplier of 1.82. The DEIS estimates the total number of dollars circulating in the economy because of the buildup as over a billion dollars. Dr. Ruane used a multiplier of 1.82 and came up with $567 million. Using a 1.5 multiplier gave her a figure of $467 million. Dr. Ruane's biggest problem is that there simply isn't any real data to determine what formula Guam should be using. Thus she'd rather err on the side of caution. She says "I'd like to be more positive about it but the numbers are just not giving me a straight answer."
It's important to know how much money will be infused into Guam's economy so that the government can calculate how much revenues they can count on. Dr. Ruane says that if the total economic benefit ends up being half of what is estimated then revenues collected by GovGuam will also be half of what is estimated.
Dr. Ruane is not against the buildup but she says this should be an opportunity to look to the future of the island and look at what other options Guam has to further develop it's economy. She says it is a good call for the community and "...military buildup or not we should find ways to move this island forward."
Written by : Clynt Ridgell
Monday, 08 February 2010
Guam - A University of Guam professor of economics is saying that the Draft Environmental Impact Statement for the Guam military buildup is inaccurately estimating the economic boost that the buildup will bring Guam. According to Dr. Claret Ruane the DEIS estimates are overstating the buildup's economic impacts.
University of Guam professor of economics Dr. Claret Ruane says that the DEIS is borrowing a formula from Hawaii to calculate the economic benefits of the Guam Military Buildup.
According to Dr. Ruane it all boils down to what's called the multiplier effect. Basically it's a formula used by economists to determine how much money will circulate through an economy. Dr. Ruane says the DEIS does this by multiplying every dollar brought into Guam from the buildup and multiplying it by 1.89. 1.89 is the same figure that Hawaii uses to determine the multiplier effect.
Dr. Ruane feels that the Guam multiplier is much less. She thinks Guam should be using a multiplier of 1.5 but just for arguments sake she based her first analysis on a multiplier of 1.82. The DEIS estimates the total number of dollars circulating in the economy because of the buildup as over a billion dollars. Dr. Ruane used a multiplier of 1.82 and came up with $567 million. Using a 1.5 multiplier gave her a figure of $467 million. Dr. Ruane's biggest problem is that there simply isn't any real data to determine what formula Guam should be using. Thus she'd rather err on the side of caution. She says "I'd like to be more positive about it but the numbers are just not giving me a straight answer."
It's important to know how much money will be infused into Guam's economy so that the government can calculate how much revenues they can count on. Dr. Ruane says that if the total economic benefit ends up being half of what is estimated then revenues collected by GovGuam will also be half of what is estimated.
Dr. Ruane is not against the buildup but she says this should be an opportunity to look to the future of the island and look at what other options Guam has to further develop it's economy. She says it is a good call for the community and "...military buildup or not we should find ways to move this island forward."
Written by : Clynt Ridgell
Cruz: DoD Not Doing Enough To Ensure Contractors Pay Guam Taxes
Cruz: DoD Not Doing Enough To Ensure Contractors Pay Guam Taxes
Monday, 08 February 2010
Guam - Vice Speaker B.J. Cruz says a provision in the National Defense Authorization Act to assist Guam in Buildup tax collections is not enough.
In a release, Cruz says he is responding to Guam Delegate Madeleine Bordallo’s assurances that the provision will provide the help needed to GovGuam.
The release states that the Speaker received a letter from Bordallo assuring him that the Department of Defense is required to report on the steps that the Department of Defense is taking to ensure that contractors performing work on Guam comply with local tax and licensing requirements.
The Vice Speaker's release states that Bordallo was responding to Cruz’s request that she act on the matter.
However Cruz's response to Bordallo is:
“The report does not require the Department of Defense to cooperate with local officials nor to adhere to any specific federal requirement to ensure its contractors are paying Guam’s federally mirrored income taxes.”
The Vice SPeaker also states: “In my letter, I specifically asked that you secure language requiring each construction contract to designate Guam as the situs and that all associated income be designated possession source income, without any special exemption. Additionally, I asked that DoD be specifically required to cooperate with tax officials on Guam."
Written by : News Release
Monday, 08 February 2010
Guam - Vice Speaker B.J. Cruz says a provision in the National Defense Authorization Act to assist Guam in Buildup tax collections is not enough.
In a release, Cruz says he is responding to Guam Delegate Madeleine Bordallo’s assurances that the provision will provide the help needed to GovGuam.
The release states that the Speaker received a letter from Bordallo assuring him that the Department of Defense is required to report on the steps that the Department of Defense is taking to ensure that contractors performing work on Guam comply with local tax and licensing requirements.
The Vice Speaker's release states that Bordallo was responding to Cruz’s request that she act on the matter.
However Cruz's response to Bordallo is:
“The report does not require the Department of Defense to cooperate with local officials nor to adhere to any specific federal requirement to ensure its contractors are paying Guam’s federally mirrored income taxes.”
The Vice SPeaker also states: “In my letter, I specifically asked that you secure language requiring each construction contract to designate Guam as the situs and that all associated income be designated possession source income, without any special exemption. Additionally, I asked that DoD be specifically required to cooperate with tax officials on Guam."
Written by : News Release
Thursday, February 11, 2010
Cruz eyes tax revenue from buildup projects
Cruz eyes tax revenue from buildup projects
Friday, 05 February 2010 00:59
by Zita Y. Taitano | Variety News Staff
VICE speaker BJ Cruz is once again calling for Congresswoman Madeleine Bordallo’s attention regarding more issues concerning the military’s draft environmental impact statement.
Cruz in reviewing the document would like assurances from Bordallo and the U.S. Congress that Guam would be able to receive the maximum amount in local tax revenues from the buildup when it begins.
Art Ilagan, Department of Revenue and Taxation director, indicated in a recent interview that Guam could be making at least $20 billion from construction done on Guam in military realignment construction projects.
In a letter he sent to Bordallo yesterday, Cruz pointed out the government of Guam’s ability to collect tax revenues from the buildup and requested for what he termed “special language in the 2012 National Defense Authorization act to support GovGuam’s collection efforts.”
He also asked the congresswoman to introduce amendments requiring all contract income related to buildup projects be determined as possession source income and for DOD to cooperate with local tax officials.
“Since it is we who will shoulder the burden of hosting the largest military transfer of hardware and personnel in decades, it is only fair that steps be taken at the federal level ensuring that the windfall from contracts related to this buildup enjoy the full scrutiny of local tax enforcement,” said Cruz.
Friday, 05 February 2010 00:59
by Zita Y. Taitano | Variety News Staff
VICE speaker BJ Cruz is once again calling for Congresswoman Madeleine Bordallo’s attention regarding more issues concerning the military’s draft environmental impact statement.
Cruz in reviewing the document would like assurances from Bordallo and the U.S. Congress that Guam would be able to receive the maximum amount in local tax revenues from the buildup when it begins.
Art Ilagan, Department of Revenue and Taxation director, indicated in a recent interview that Guam could be making at least $20 billion from construction done on Guam in military realignment construction projects.
In a letter he sent to Bordallo yesterday, Cruz pointed out the government of Guam’s ability to collect tax revenues from the buildup and requested for what he termed “special language in the 2012 National Defense Authorization act to support GovGuam’s collection efforts.”
He also asked the congresswoman to introduce amendments requiring all contract income related to buildup projects be determined as possession source income and for DOD to cooperate with local tax officials.
“Since it is we who will shoulder the burden of hosting the largest military transfer of hardware and personnel in decades, it is only fair that steps be taken at the federal level ensuring that the windfall from contracts related to this buildup enjoy the full scrutiny of local tax enforcement,” said Cruz.
Wednesday, February 10, 2010
Senator Pangelinan Says Military's Estimates of GovGuam's Revenues During Buildup are Flawed
Senator Pangelinan Says Military's Estimates of GovGuam's Revenues During Buildup are Flawed
Guam - Senator Ben Pangelinan has issued a release saying the military's estimates of GovGuam's revenues during the military buildup are flawed.
According to Pangelinan government economists and bureacrates use a simple financial ratio of general tax revenue to gross island product. The rule of thumb is GovGuam collects 10% of every new dollar invested into the economy after it multiplies through. According to the Draft Environmental Impact Statement Govguam will collect between 42% to 49% of the estimated Gross Island Product during the buildup. Because of this the senator has sent leters to several experts in the private sector, UOG, GovGuam, the Government Accountability Office and the Department of Defense asking them to provide an analysis of the revenue estimates in the DEIS.
Written by :
Clynt Ridgell
Guam - Senator Ben Pangelinan has issued a release saying the military's estimates of GovGuam's revenues during the military buildup are flawed.
According to Pangelinan government economists and bureacrates use a simple financial ratio of general tax revenue to gross island product. The rule of thumb is GovGuam collects 10% of every new dollar invested into the economy after it multiplies through. According to the Draft Environmental Impact Statement Govguam will collect between 42% to 49% of the estimated Gross Island Product during the buildup. Because of this the senator has sent leters to several experts in the private sector, UOG, GovGuam, the Government Accountability Office and the Department of Defense asking them to provide an analysis of the revenue estimates in the DEIS.
Written by :
Clynt Ridgell
Pangelinan Finds Flaws In DEIS Estimate of GovGuam Revenues
Pangelinan Finds Flaws In DEIS Estimate of GovGuam Revenues
Guam - The Legislature's Appropriations Committee Chairman, Senator Ben Pangelinan, says he has already found flaws in the DEIS projections of Local Government Revenues [Section 4.3.3].
In a release, Senator Pangelinan explained, “We used a simple financial ratio of General Tax Revenue to Gross Island Product that has served the government economists and bureaucrats well over the years when assessing new investment into our economy. The rule of thumb is that the government of Guam collects 10% of every new dollar invested into our economy after it multiplies through.”
General Tax Revenue in the more conservative constrained DEIS analysis show collections that are between 42 to 49% of estimated additional Gross Island Product related to the buildup. “There is something in their financial model that is causing a wide variance in the ratio but because the methodology and actual model were not disclosed in the DEIS there is no way for us to even scrutinize the estimates,” according to Pangelinan.
Local business organizations continue to lobby support for the buildup as positive because of the economic growth that will occur as a result of the Marine relocation from Okinawa. Senator pangelinan agrees that growing the economy is important but that the government of Guam must balance economic growth and protection of the environment, culture and quality of life of island residents.
Senator Pangelinan concluded “Last week I sent letters to several experts in the private sector, the University of Guam, GOVGUAM, the Government Accountability Office and the Department of Defense asking them to provide analysis of the revenue estimates to confirm our findings. The core questions that must be answered with some degree of comfort before we get to the table are the cost and future revenue collections that will result from this buildup.”
For further information, please contact the Offices of Senator ben pangelinan at 473-4236 or email at senbenp@guam.net
Written by :
News Release
Guam - The Legislature's Appropriations Committee Chairman, Senator Ben Pangelinan, says he has already found flaws in the DEIS projections of Local Government Revenues [Section 4.3.3].
In a release, Senator Pangelinan explained, “We used a simple financial ratio of General Tax Revenue to Gross Island Product that has served the government economists and bureaucrats well over the years when assessing new investment into our economy. The rule of thumb is that the government of Guam collects 10% of every new dollar invested into our economy after it multiplies through.”
General Tax Revenue in the more conservative constrained DEIS analysis show collections that are between 42 to 49% of estimated additional Gross Island Product related to the buildup. “There is something in their financial model that is causing a wide variance in the ratio but because the methodology and actual model were not disclosed in the DEIS there is no way for us to even scrutinize the estimates,” according to Pangelinan.
Local business organizations continue to lobby support for the buildup as positive because of the economic growth that will occur as a result of the Marine relocation from Okinawa. Senator pangelinan agrees that growing the economy is important but that the government of Guam must balance economic growth and protection of the environment, culture and quality of life of island residents.
Senator Pangelinan concluded “Last week I sent letters to several experts in the private sector, the University of Guam, GOVGUAM, the Government Accountability Office and the Department of Defense asking them to provide analysis of the revenue estimates to confirm our findings. The core questions that must be answered with some degree of comfort before we get to the table are the cost and future revenue collections that will result from this buildup.”
For further information, please contact the Offices of Senator ben pangelinan at 473-4236 or email at senbenp@guam.net
Written by :
News Release
Wednesday, February 03, 2010
PNC :: GEDA: Buildup Comes With Some Big Negatives
PNC :: GEDA: Buildup Comes With Some Big Negatives
Friday, 29 January 2010
Guam - GEDA Administrator Tony Blaz has submitted his top concerns over the impact of the military buildup to Senator Frank Aguon Jr.'s Committee on Economic Development.
In his letter to Aguon, Blaz lists the following impacts and concerns:
*GRT, corporate income taxes and personal income taxes could be as high as $423 in 2014 and then declining to $104 million in 2017.
*There may be a time lag between when GovGuam revenues are needed and when they are available for use.
*The buildup would generate more demands on Guam for roads, ports sewer, water, power and other infrastructure and will increase the pressure for substantial borrowing.
Read GEDA's list of concerns and impacts
*Members of the military do not spend a great deal of their income in the local economy, especially if they are housed on base and buy their groceries on base. Currently only 12% of the enlisted military income is spent on Guam.
*The average annual income of military personnel is just $29-thousand dollars. 11,182 active duty personnel translates into a total annual payroll of #323 million. Just 12% will be spent in the local economy.
*Housing for the military will be provided by the military, not the Guam private market. Local shippers and wholesaler will increase sales to the military bases but when imported goods are sold on base, most of the value of those sales won't be realized and profits won't be reinvested locally.
*There will be a "recession-like" period after 2014 when business will have to lay off workers after the peak buildup period.
*Guam workers will likely see the cot of living continue to rise faster than their incomes.
*The cost of living during the construction phase could negatively affect households on fixed incomes, although other households could benefit from rising wages.
*Hotels could benefit conssiderably, but the service sector could undergo a difficult period due to loss of labor to higher paying jobs and pressure or increased wages.
Written by : Kevin Kerrigan
Friday, 29 January 2010
Guam - GEDA Administrator Tony Blaz has submitted his top concerns over the impact of the military buildup to Senator Frank Aguon Jr.'s Committee on Economic Development.
In his letter to Aguon, Blaz lists the following impacts and concerns:
*GRT, corporate income taxes and personal income taxes could be as high as $423 in 2014 and then declining to $104 million in 2017.
*There may be a time lag between when GovGuam revenues are needed and when they are available for use.
*The buildup would generate more demands on Guam for roads, ports sewer, water, power and other infrastructure and will increase the pressure for substantial borrowing.
Read GEDA's list of concerns and impacts
*Members of the military do not spend a great deal of their income in the local economy, especially if they are housed on base and buy their groceries on base. Currently only 12% of the enlisted military income is spent on Guam.
*The average annual income of military personnel is just $29-thousand dollars. 11,182 active duty personnel translates into a total annual payroll of #323 million. Just 12% will be spent in the local economy.
*Housing for the military will be provided by the military, not the Guam private market. Local shippers and wholesaler will increase sales to the military bases but when imported goods are sold on base, most of the value of those sales won't be realized and profits won't be reinvested locally.
*There will be a "recession-like" period after 2014 when business will have to lay off workers after the peak buildup period.
*Guam workers will likely see the cot of living continue to rise faster than their incomes.
*The cost of living during the construction phase could negatively affect households on fixed incomes, although other households could benefit from rising wages.
*Hotels could benefit conssiderably, but the service sector could undergo a difficult period due to loss of labor to higher paying jobs and pressure or increased wages.
Written by : Kevin Kerrigan
Economist: Buildup, tourism can coexist
Economist: Buildup, tourism can coexist
By Laura Matthews • Pacific Daily News • January 29, 2010
Guam's biggest export is its sunshine, and more than a million visitors travel here every year to enjoy what they lack in their cold climate -- beautiful beaches and tropical weather.
However, with the military buildup less than five years away, some are wondering if it will connect with a tourism industry that has been providing for the island for more than 40 years.
Claret Ruane, resident economist for the University of Guam's Pacific Center for Economic Initiatives, believes the two giants can live together.
"When you have more military here, their friends and families will be visiting from the mainland and that will be a resource for tourism," Ruane said. "And I am thinking not only can they coexist, but you can push forward for sustainable tourism -- ecotourism."
Speaking at the Fourth Annual Youth Summit at the Harvest Life Center in Barrigada yesterday, Ruane said because the purchasing power of people from the mainland is high, they will tend to splurge on the "expensive tourism product."
Ruane said her only problem is she wished the island had more tourism products to offer. She said everyone will need to take on a new outlook as the buildup approaches.
"Military buildup or not, we need to move the island forward," Ruane said. "We should have been a stronger economy to begin with and we have to start today to think about what it is we need to do. ... We can't turn everybody into the construction business and work the jobs ourselves. We should start thinking of new industries."
But there are some who feel the $15 billion buildup could be a pyrrhic victory.
"The bottom line is that it appears that economic impacts exceed economic benefits," said Anthony C, Blaz, administrator for the Guam Economic Development Authority.
The draft Environmental Impact Statement states that while the hotels will benefit "considerably" from the buildup, the general service sector could experience a period of hardship from losing labor to higher-paying jobs. It also says the pressure for increased wages could impair competition with inexpensive Asian destinations.
Furthermore, even though the government could get about $423 million more in tax revenue at the peak of the buildup in 2014 than it currently does, that would trickle to about $104 million more in 2017 than current government revenues. After 2014, the island could experience a recession-like period that could send some businesses packing or experience cutbacks and workers migrating because of job losses.
Cara Flores-Mays, a small business owner and a member of We Are Guahan, believes that the military buildup and tourism are incompatible. We Are Guahan is a group of concerned citizens who are reading the draft EIS and trying to simplify it for residents.
She said the dredging of the ocean and excess noise from the additional aircraft visits could have a negative impact.
The Department of Defense plans to widen an existing shipping channel to fit a carrier. Additionally, to create a turning basin near the wharf, about 2.3 million square feet of sea floor will be dredged.
About 35 percent of that area is covered in coral reef that will be permanently destroyed, the draft EIS states.
"We could basically lose markets to buildup construction that will cause chaos," Flores-Mays said. "We cannot rely on the military to be our savior. Prosperity for a few is greed if it's not prosperity for all."
Vice Speaker Benjamin Cruz, the chairman for the Committee on Tourism, said the only way the two opportunities can work for Guam is if the military doesn't insist that it has to destroy the reef, and build on other properties it has in the north.
"I'm almost ready to suggest to them to keep yourselves within your reservations," he said. "Don't destroy the island."
By Laura Matthews • Pacific Daily News • January 29, 2010
Guam's biggest export is its sunshine, and more than a million visitors travel here every year to enjoy what they lack in their cold climate -- beautiful beaches and tropical weather.
However, with the military buildup less than five years away, some are wondering if it will connect with a tourism industry that has been providing for the island for more than 40 years.
Claret Ruane, resident economist for the University of Guam's Pacific Center for Economic Initiatives, believes the two giants can live together.
"When you have more military here, their friends and families will be visiting from the mainland and that will be a resource for tourism," Ruane said. "And I am thinking not only can they coexist, but you can push forward for sustainable tourism -- ecotourism."
Speaking at the Fourth Annual Youth Summit at the Harvest Life Center in Barrigada yesterday, Ruane said because the purchasing power of people from the mainland is high, they will tend to splurge on the "expensive tourism product."
Ruane said her only problem is she wished the island had more tourism products to offer. She said everyone will need to take on a new outlook as the buildup approaches.
"Military buildup or not, we need to move the island forward," Ruane said. "We should have been a stronger economy to begin with and we have to start today to think about what it is we need to do. ... We can't turn everybody into the construction business and work the jobs ourselves. We should start thinking of new industries."
But there are some who feel the $15 billion buildup could be a pyrrhic victory.
"The bottom line is that it appears that economic impacts exceed economic benefits," said Anthony C, Blaz, administrator for the Guam Economic Development Authority.
The draft Environmental Impact Statement states that while the hotels will benefit "considerably" from the buildup, the general service sector could experience a period of hardship from losing labor to higher-paying jobs. It also says the pressure for increased wages could impair competition with inexpensive Asian destinations.
Furthermore, even though the government could get about $423 million more in tax revenue at the peak of the buildup in 2014 than it currently does, that would trickle to about $104 million more in 2017 than current government revenues. After 2014, the island could experience a recession-like period that could send some businesses packing or experience cutbacks and workers migrating because of job losses.
Cara Flores-Mays, a small business owner and a member of We Are Guahan, believes that the military buildup and tourism are incompatible. We Are Guahan is a group of concerned citizens who are reading the draft EIS and trying to simplify it for residents.
She said the dredging of the ocean and excess noise from the additional aircraft visits could have a negative impact.
The Department of Defense plans to widen an existing shipping channel to fit a carrier. Additionally, to create a turning basin near the wharf, about 2.3 million square feet of sea floor will be dredged.
About 35 percent of that area is covered in coral reef that will be permanently destroyed, the draft EIS states.
"We could basically lose markets to buildup construction that will cause chaos," Flores-Mays said. "We cannot rely on the military to be our savior. Prosperity for a few is greed if it's not prosperity for all."
Vice Speaker Benjamin Cruz, the chairman for the Committee on Tourism, said the only way the two opportunities can work for Guam is if the military doesn't insist that it has to destroy the reef, and build on other properties it has in the north.
"I'm almost ready to suggest to them to keep yourselves within your reservations," he said. "Don't destroy the island."
Tuesday, January 19, 2010
DEIS perspectives: It’s a Catch-22
DEIS perspectives: It’s a Catch-22
Tuesday, 19 January 2010 05:40
by Leevin Taitano Camacho
DEIS Perspectives
THE public hearings have come to an end and most people agree that Guam will see an increase in economic activity as a result of the buildup. Some have taken it further and suggested that the additional tax revenues GovGuam is expected to receive will improve GovGuam services and the standard of living for most of us. They reason that GovGuam will be able to fix the Guam Department of Education, Guam Memorial Hospital and other public agencies with the additional $327 million collected in taxes in 2014 and $96 million collected in 2017 and onward. This logic, however, is oversimplified because it fails to take into account any costs associated with the anticipated population explosion.
According to the draft environmental impact statement, Guam is expected to receive an increase of $327 million in 2014 and a population increase of 79,178 people. This averages out to an additional $4,130 in taxes per person. By 2017 and onward, the additional tax revenue will decrease to $96 million with an increase of 33,431 people. This averages out to $2,890 in additional taxes per person, which is lower than the current amount of taxes GovGuam collects per person. In the long term, GovGuam will receive 25 percent in additional tax revenues, but will also experience a 17 percent increase in population.
To get an idea of specific costs associated with the increase in population, one need look no further than the draft impact report which predicts that agencies such as DOE, Guam Department of Mental Health and Substance Abuse other public safety agencies will have to increase their staffing by 44 percent in 2014 and 17 percent in 2017 and beyond. DOE will have to hire 420 additional teachers in 2014 to maintain the current teacher to student ratio after the influx of 6,200 students.
The response is that GovGuam will be able to pay for the increase in demand for public services with the increase in tax revenue. This begs the question as GovGuam can only tax people when they get to Guam. In contrast to GPA and GWA, which both can raise rates now to pay for improvements, DOE and other agencies rely primarily on the general fund for their budget. If GovGuam does not have enough revenue to prepare for the population boom, GovGuam will either have to take on more debt, or our public schools, hospital and other public services will be even more overburdened than they are today.
GovGuam’s financial inability to properly prepare for the population explosion is even more concerning when viewed along with the draft impact report’s explicit finding that the standard of living on Guam, or purchasing power, will most likely decrease for people on fixed incomes because of the rising costs of goods caused by the buildup. Putting two and two together, the same people who use GMH and send their children to public schools will have to endure even more overcrowding at our schools and hospital and have a lower standard of living.
The draft study predicts that Guam will see an increase in economic activity and GovGuam will see an increase in tax revenue. But the idea that GovGuam will be able to fix GovGuam agencies such as DOE and GMH or that the standard of living for most people on Guam will improve is not rooted in the text of the draft environmental impact statement.
(Leevin Taitano Camacho, a resident of Yigo, is lawyer).
Tuesday, 19 January 2010 05:40
by Leevin Taitano Camacho
DEIS Perspectives
THE public hearings have come to an end and most people agree that Guam will see an increase in economic activity as a result of the buildup. Some have taken it further and suggested that the additional tax revenues GovGuam is expected to receive will improve GovGuam services and the standard of living for most of us. They reason that GovGuam will be able to fix the Guam Department of Education, Guam Memorial Hospital and other public agencies with the additional $327 million collected in taxes in 2014 and $96 million collected in 2017 and onward. This logic, however, is oversimplified because it fails to take into account any costs associated with the anticipated population explosion.
According to the draft environmental impact statement, Guam is expected to receive an increase of $327 million in 2014 and a population increase of 79,178 people. This averages out to an additional $4,130 in taxes per person. By 2017 and onward, the additional tax revenue will decrease to $96 million with an increase of 33,431 people. This averages out to $2,890 in additional taxes per person, which is lower than the current amount of taxes GovGuam collects per person. In the long term, GovGuam will receive 25 percent in additional tax revenues, but will also experience a 17 percent increase in population.
To get an idea of specific costs associated with the increase in population, one need look no further than the draft impact report which predicts that agencies such as DOE, Guam Department of Mental Health and Substance Abuse other public safety agencies will have to increase their staffing by 44 percent in 2014 and 17 percent in 2017 and beyond. DOE will have to hire 420 additional teachers in 2014 to maintain the current teacher to student ratio after the influx of 6,200 students.
The response is that GovGuam will be able to pay for the increase in demand for public services with the increase in tax revenue. This begs the question as GovGuam can only tax people when they get to Guam. In contrast to GPA and GWA, which both can raise rates now to pay for improvements, DOE and other agencies rely primarily on the general fund for their budget. If GovGuam does not have enough revenue to prepare for the population boom, GovGuam will either have to take on more debt, or our public schools, hospital and other public services will be even more overburdened than they are today.
GovGuam’s financial inability to properly prepare for the population explosion is even more concerning when viewed along with the draft impact report’s explicit finding that the standard of living on Guam, or purchasing power, will most likely decrease for people on fixed incomes because of the rising costs of goods caused by the buildup. Putting two and two together, the same people who use GMH and send their children to public schools will have to endure even more overcrowding at our schools and hospital and have a lower standard of living.
The draft study predicts that Guam will see an increase in economic activity and GovGuam will see an increase in tax revenue. But the idea that GovGuam will be able to fix GovGuam agencies such as DOE and GMH or that the standard of living for most people on Guam will improve is not rooted in the text of the draft environmental impact statement.
(Leevin Taitano Camacho, a resident of Yigo, is lawyer).
Sunday, November 22, 2009
EIS: 33,000 new jobs by 2014
EIS: 33,000 new jobs by 2014
By Laura Matthews • Pacific Daily News • November 23, 2009
Guam's unemployment rate will drop by more than half in 2014 as the buildup creates thousands of jobs, according to the draft Environmental Impact Statement for the proposed, multibillion-dollar military expansions on the island.
With more people paying income taxes, and as businesses pay more taxes and fees, the draft Environmental Impact Statement estimates that government of Guam will generate $325 million in 2014 revenue alone -- an increase of about 60 percent of its current annual budget.
In the recently published Defense Department document, which contains thousands of pages, Guam's unemployment rate is assumed to fall to 4.0 percent when Guam residents and off-islanders start taking on jobs associated with the military buildup.
The unemployment rate was last recorded in September 2007 and is estimated to be 8.3 percent, according to the document.
Guam's population is expected to soar -- with 79,178 additional people in 2014. That is approximately half of the current population.
The buildup, according to the EIS, may include the relocation of 8,600 Marines and their 9,000 dependents from Okinawa to Guam. An Army ballistic missile defense facility and a facility for recurring visits of an aircraft carrier are included in the proposed expansions.
The quality of life for many residents will improve as the buildup is projected to provide approximately 33,000 jobs for civilian workers at the 2014 peak, according to the draft EIS. An additional 6,150 jobs will be provided on a "more permanent basis" thereafter.
Guam residents are estimated to occupy about 2,000 direct on-site construction jobs for the Marine Corps facilities between 2013 and 2014.
Similarly, excluding direct on-site military construction, residents are expected to capitalize on 2,566 jobs during the 2014 construction boom. The related jobs "include civilian military jobs, direct from purchases jobs and indirect or induced jobs."
An additional 2,211 jobs will be made available by 2020 for Guam residents, as the 15,157 jobs that will be occupied by off-islanders during the boom, will decrease to 3,935 that year, as estimated by the EIS.
The EIS estimates that the increase in buildup economic activities will generate tax revenues for GovGuam worth about $97 million a year after 2014. These revenues will be collected through gross receipts, corporate income and personal income taxes.
Salaries to increase
The average full-time salary -- including those that are indirect jobs -- during both the construction and operational phases, will increase in tandem with the demand for labor.
The EIS states Guam incomes will rise and the average full-time salary for jobs within the construction phase would increase to $33,500, up from the 2007 average of $28,150. This is because there will be more "higher-paying jobs in the architecture and engineering, wholesale trade, and health services industries."
The full-time salary for jobs during the military operational phase would rise to $40,000. It was $28,150 in 2007.
Only about 25 percent of civilian military jobs are expected to be filled by current Guam residents, the document said.
Residents have until Feb. 17, 2010, to provide feedback on the draft EIS for it to be finalized and put into action.
By Laura Matthews • Pacific Daily News • November 23, 2009
Guam's unemployment rate will drop by more than half in 2014 as the buildup creates thousands of jobs, according to the draft Environmental Impact Statement for the proposed, multibillion-dollar military expansions on the island.
With more people paying income taxes, and as businesses pay more taxes and fees, the draft Environmental Impact Statement estimates that government of Guam will generate $325 million in 2014 revenue alone -- an increase of about 60 percent of its current annual budget.
In the recently published Defense Department document, which contains thousands of pages, Guam's unemployment rate is assumed to fall to 4.0 percent when Guam residents and off-islanders start taking on jobs associated with the military buildup.
The unemployment rate was last recorded in September 2007 and is estimated to be 8.3 percent, according to the document.
Guam's population is expected to soar -- with 79,178 additional people in 2014. That is approximately half of the current population.
The buildup, according to the EIS, may include the relocation of 8,600 Marines and their 9,000 dependents from Okinawa to Guam. An Army ballistic missile defense facility and a facility for recurring visits of an aircraft carrier are included in the proposed expansions.
The quality of life for many residents will improve as the buildup is projected to provide approximately 33,000 jobs for civilian workers at the 2014 peak, according to the draft EIS. An additional 6,150 jobs will be provided on a "more permanent basis" thereafter.
Guam residents are estimated to occupy about 2,000 direct on-site construction jobs for the Marine Corps facilities between 2013 and 2014.
Similarly, excluding direct on-site military construction, residents are expected to capitalize on 2,566 jobs during the 2014 construction boom. The related jobs "include civilian military jobs, direct from purchases jobs and indirect or induced jobs."
An additional 2,211 jobs will be made available by 2020 for Guam residents, as the 15,157 jobs that will be occupied by off-islanders during the boom, will decrease to 3,935 that year, as estimated by the EIS.
The EIS estimates that the increase in buildup economic activities will generate tax revenues for GovGuam worth about $97 million a year after 2014. These revenues will be collected through gross receipts, corporate income and personal income taxes.
Salaries to increase
The average full-time salary -- including those that are indirect jobs -- during both the construction and operational phases, will increase in tandem with the demand for labor.
The EIS states Guam incomes will rise and the average full-time salary for jobs within the construction phase would increase to $33,500, up from the 2007 average of $28,150. This is because there will be more "higher-paying jobs in the architecture and engineering, wholesale trade, and health services industries."
The full-time salary for jobs during the military operational phase would rise to $40,000. It was $28,150 in 2007.
Only about 25 percent of civilian military jobs are expected to be filled by current Guam residents, the document said.
Residents have until Feb. 17, 2010, to provide feedback on the draft EIS for it to be finalized and put into action.
Monday, August 10, 2009
$65 Million in New Revenue for Guam
$65M in new revenue: Bill aims to spend $540M in fiscal 2010
By Brett Kelman • Pacific Daily News • August 11, 2009
Buildup construction and federal economic stimulus funding could generate up to $65 million in new revenue for the government of Guam next fiscal year, Office of Finance and Budget Director Chris Budasi told senators yesterday.
Of that possible $65 million, a "conservative" budget proposal being reviewed by lawmakers would result in spending only $30 million, Budasi added.
The spillover will be used to shrink GovGuam's deficit, he said.
For every new dollar injected into Guam next fiscal year, GovGuam expects to make a dime, Budasi said.
Senators met to begin discussions about how much money GovGuam expects to receive and spend next year. The revised budget bill would spend about $540 million of
General Fund money to run the government and $101 million to pay tax refunds.
The General Fund spending allocated in this year's budget was about $20 million less than the proposed fiscal 2010 budget bill.
Budasi, who helped propose the budget bill with Democratic Sen. Ben Pangelinan's finance committee, said new revenue streams will be created by the coming military buildup and President Obama's plan to invigorate the economy by pouring money into local governments.
The coming military buildup will bring about 8,000 Marines, their 9,000 dependents and as many as 10,000 skilled laborers to Guam over the next few years. An unprecedented level of construction is needed to ready the island for its new residents -- and whoever does that construction must pay taxes.
Budasi cited the new Naval Hospital, which will be rebuilt over the next few years so it can accommodate Guam's growing military population, as an example of a project that would generate revenue for GovGuam.
"It's a $450 million project that we believe is going to be broken up over the next four fiscal years. Some of the activity is going to hit in this fiscal year then in subsequent years," he said. "We cut that $450 million number up, and we apply our adjustment to it for how much of that money we think is going to stay in the economy. ... And then that is the number that we believe is activity that will generate additional tax revenue."
Budasi said another source of new revenue are federal economic stimulus dollars Guam will receive shortly. Gov. Felix Camacho submitted an application last week for more than $108 million in economic stimulus projects.
Most of that money must be spent in the next few years, and a lot of the funding will be spent on repairs or construction at local schools or public projects. Whoever does that work must pay taxes too, generating revenue, Budasi said.
Revenues questioned
Republican Sen. Eddie Calvo, a former chairman of the legislative committee on finance, questioned the estimated revenue increases in the bill.
Calvo has announced he is running for governor in 2010 and, if he wins, he could inherit the budget the Legislature debated yesterday.
Calvo questioned if Pangelinan's revenue estimate was too high or based on unverified numbers. Pangelinan said the revenue estimates were based on the government's actual cash collection.
Republican Sen. Ray Tenorio, who's running with Calvo, worried Pangelinan's committee hadn't considered that GovGuam may have less money this year than planned. According to an estimate from the Bureau of Budget and Management Research, GovGuam will generate about $9 million less this fiscal year than had been projected.
Pangelinan said his committee had already factored that into the fiscal 2010 numbers.
Both Calvo and Tenorio asked Pangelinan to call some of Guam's government finance experts to review and validate the revenue projections presented by Budasi. Democratic Sen. Rory Respicio objected to the experts being called.
Respicio said he felt that every time the senators called those experts to review a proposed budget, revenues "magically" matched whatever GovGuam needed to spend. Instead, Respicio felt the Legislature should move ahead with the revenues presented by Budasi.
Tenorio said it was "unfathomable" that any senator would object to financial experts being called to review a budget proposal. Tenorio and Respicio left the floor to argue about the issue.
Those experts didn't take the floor yesterday, but may be brought in today. Session resumes at 9 a.m.
Tourism
Tourism, which is traditionally one of Guam's largest revenue sources, isn't expected to change much next fiscal year, according to Budasi's budget proposal presentation.
Budasi said the number of tourists next year will hopefully hold steady, but each tourist is expected to spend a little less while they are here, based on Guam Visitors Bureau estimates from June.
"We ran the numbers out and it looks like about a $7 million decrease to the economy," he said.
A GVB report released last week showed a 37 percent drop in tourist arrivals in June, partially because of a rocky economy and fears about the H1N1 influenza pandemic, but GVB General Manager Gerry Perez said the worst was probably over.
Perez said Budasi's estimate for the Legislature was a "fair representation" of what Guam's tourism numbers for next year may be, and because the future is never certain, it helps to be a little conservative.
"Based on everything we know, we expect there to be a slight improvement for the next fiscal year," he said. "Now keep in mind that any catastrophic thing could happen as well. We never expected H1N1."
Education
The proposed budget discussed by senators yesterday would appropriate less money to the Department of Education than last fiscal year, and far less than school system leaders requested.
The department, formerly the Guam Public School System, almost always gets the largest chunk of GovGuam's budget, but rarely gets as much funding as requested.
If passed as is, the budget bill would appropriate about $183 million to the department. A budget request approved by the Guam Education Policy Board in March asks for $263 million.
Last year, the school system requested $263 million, but received $189 million. Guam Education Policy Board Chairman Joe San Agustin has said repeatedly that the lack of full funding is responsible for many of the school system's shortcomings.
By Brett Kelman • Pacific Daily News • August 11, 2009
Buildup construction and federal economic stimulus funding could generate up to $65 million in new revenue for the government of Guam next fiscal year, Office of Finance and Budget Director Chris Budasi told senators yesterday.
Of that possible $65 million, a "conservative" budget proposal being reviewed by lawmakers would result in spending only $30 million, Budasi added.
The spillover will be used to shrink GovGuam's deficit, he said.
For every new dollar injected into Guam next fiscal year, GovGuam expects to make a dime, Budasi said.
Senators met to begin discussions about how much money GovGuam expects to receive and spend next year. The revised budget bill would spend about $540 million of
General Fund money to run the government and $101 million to pay tax refunds.
The General Fund spending allocated in this year's budget was about $20 million less than the proposed fiscal 2010 budget bill.
Budasi, who helped propose the budget bill with Democratic Sen. Ben Pangelinan's finance committee, said new revenue streams will be created by the coming military buildup and President Obama's plan to invigorate the economy by pouring money into local governments.
The coming military buildup will bring about 8,000 Marines, their 9,000 dependents and as many as 10,000 skilled laborers to Guam over the next few years. An unprecedented level of construction is needed to ready the island for its new residents -- and whoever does that construction must pay taxes.
Budasi cited the new Naval Hospital, which will be rebuilt over the next few years so it can accommodate Guam's growing military population, as an example of a project that would generate revenue for GovGuam.
"It's a $450 million project that we believe is going to be broken up over the next four fiscal years. Some of the activity is going to hit in this fiscal year then in subsequent years," he said. "We cut that $450 million number up, and we apply our adjustment to it for how much of that money we think is going to stay in the economy. ... And then that is the number that we believe is activity that will generate additional tax revenue."
Budasi said another source of new revenue are federal economic stimulus dollars Guam will receive shortly. Gov. Felix Camacho submitted an application last week for more than $108 million in economic stimulus projects.
Most of that money must be spent in the next few years, and a lot of the funding will be spent on repairs or construction at local schools or public projects. Whoever does that work must pay taxes too, generating revenue, Budasi said.
Revenues questioned
Republican Sen. Eddie Calvo, a former chairman of the legislative committee on finance, questioned the estimated revenue increases in the bill.
Calvo has announced he is running for governor in 2010 and, if he wins, he could inherit the budget the Legislature debated yesterday.
Calvo questioned if Pangelinan's revenue estimate was too high or based on unverified numbers. Pangelinan said the revenue estimates were based on the government's actual cash collection.
Republican Sen. Ray Tenorio, who's running with Calvo, worried Pangelinan's committee hadn't considered that GovGuam may have less money this year than planned. According to an estimate from the Bureau of Budget and Management Research, GovGuam will generate about $9 million less this fiscal year than had been projected.
Pangelinan said his committee had already factored that into the fiscal 2010 numbers.
Both Calvo and Tenorio asked Pangelinan to call some of Guam's government finance experts to review and validate the revenue projections presented by Budasi. Democratic Sen. Rory Respicio objected to the experts being called.
Respicio said he felt that every time the senators called those experts to review a proposed budget, revenues "magically" matched whatever GovGuam needed to spend. Instead, Respicio felt the Legislature should move ahead with the revenues presented by Budasi.
Tenorio said it was "unfathomable" that any senator would object to financial experts being called to review a budget proposal. Tenorio and Respicio left the floor to argue about the issue.
Those experts didn't take the floor yesterday, but may be brought in today. Session resumes at 9 a.m.
Tourism
Tourism, which is traditionally one of Guam's largest revenue sources, isn't expected to change much next fiscal year, according to Budasi's budget proposal presentation.
Budasi said the number of tourists next year will hopefully hold steady, but each tourist is expected to spend a little less while they are here, based on Guam Visitors Bureau estimates from June.
"We ran the numbers out and it looks like about a $7 million decrease to the economy," he said.
A GVB report released last week showed a 37 percent drop in tourist arrivals in June, partially because of a rocky economy and fears about the H1N1 influenza pandemic, but GVB General Manager Gerry Perez said the worst was probably over.
Perez said Budasi's estimate for the Legislature was a "fair representation" of what Guam's tourism numbers for next year may be, and because the future is never certain, it helps to be a little conservative.
"Based on everything we know, we expect there to be a slight improvement for the next fiscal year," he said. "Now keep in mind that any catastrophic thing could happen as well. We never expected H1N1."
Education
The proposed budget discussed by senators yesterday would appropriate less money to the Department of Education than last fiscal year, and far less than school system leaders requested.
The department, formerly the Guam Public School System, almost always gets the largest chunk of GovGuam's budget, but rarely gets as much funding as requested.
If passed as is, the budget bill would appropriate about $183 million to the department. A budget request approved by the Guam Education Policy Board in March asks for $263 million.
Last year, the school system requested $263 million, but received $189 million. Guam Education Policy Board Chairman Joe San Agustin has said repeatedly that the lack of full funding is responsible for many of the school system's shortcomings.
Tuesday, January 29, 2008
Foreign Citizens
Contact: Charlie Keller 202-225-1002
REP. BROWN-WAITE SUPPORTS ECONOMIC STIMULUS FOR FLORIDA TAXPAYERS
Opposes Provisions that Give American Taxpayer Funds to Foreign Citizens and Keep Seniors Reliant on Social Security from Receiving Help
Washington, D.C., Jan 29 -
U.S. Representative Ginny Brown-Waite (FL-05) today reluctantly supported House passage of H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008.
“While almost every Member of this body supports an economic stimulus package, I really must question the legislation before us today. Missing from the bill is any attempt to help those senior citizens who rely solely on Social Security for their income; a group that includes thousands of my constituents. Many of my retired constituents face rising property taxes, astronomical homeowner’s insurance rates and cannot afford to keep their home without help from the federal government. While House passage today moves the legislation forward, I sincerely hope that the Senate will include measures to help our senior citizens with an economic stimulus of their own.
“Second, the bill sends hundreds of millions of dollars to people who do not pay federal income taxes, including residents of Puerto Rico and territories like Guam. I do not believe American taxpayer funds should be sent to foreign citizens who do not pay taxes. Americans want an economic stimulus for Dunnellon, Brooksville and Clermont, not for San Juan or Hagatna. As the legislation moves forward, it must be changed to ensure that only federal taxpaying American citizens receive rebate checks.
“This bill is also flawed for what it does not address; the failure of Democrats to pass a state sales tax exemption for Florida taxpayers during 2007. One easy way to put thousands of dollars back into taxpayers’ pockets would be to reinstitute the state sales tax exemption for states like Florida, Texas and Tennessee, states whose citizens are disadvantaged by the federal tax code since they do not pay state income taxes. Fairness dictates that the federal tax code should treat American citizens equally, and passing the state sales tax exemption will make Florida whole and put millions of dollars back into our economy. I am currently drafting a Florida delegation letter to Speaker Pelosi and Chairman Rangel outlining the need for a renewal of the exemption and that such a renewal be added to the very next tax package that comes before the House.
“Our economic stimulus package should go to those struggling to keep their homes, whether it is the result of losing their job, or as it is in my district, having to pay the 500-700% increase in their homeowner’s insurance rates. Tax rebate checks should go to American taxpaying citizens, not foreign citizens and nationals who don’t pay into the federal treasury. As this bill goes forward, we must address the need for state sales tax deduction renewal and targeted relief for senior citizens who make too much to qualify for rebate checks under the current legislation. I call on the Senate to improve the stimulus package as I have outlined above, and look forward to it coming back to the House for final passage after my concerns have been addressed.”
REP. BROWN-WAITE SUPPORTS ECONOMIC STIMULUS FOR FLORIDA TAXPAYERS
Opposes Provisions that Give American Taxpayer Funds to Foreign Citizens and Keep Seniors Reliant on Social Security from Receiving Help
Washington, D.C., Jan 29 -
U.S. Representative Ginny Brown-Waite (FL-05) today reluctantly supported House passage of H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008.
“While almost every Member of this body supports an economic stimulus package, I really must question the legislation before us today. Missing from the bill is any attempt to help those senior citizens who rely solely on Social Security for their income; a group that includes thousands of my constituents. Many of my retired constituents face rising property taxes, astronomical homeowner’s insurance rates and cannot afford to keep their home without help from the federal government. While House passage today moves the legislation forward, I sincerely hope that the Senate will include measures to help our senior citizens with an economic stimulus of their own.
“Second, the bill sends hundreds of millions of dollars to people who do not pay federal income taxes, including residents of Puerto Rico and territories like Guam. I do not believe American taxpayer funds should be sent to foreign citizens who do not pay taxes. Americans want an economic stimulus for Dunnellon, Brooksville and Clermont, not for San Juan or Hagatna. As the legislation moves forward, it must be changed to ensure that only federal taxpaying American citizens receive rebate checks.
“This bill is also flawed for what it does not address; the failure of Democrats to pass a state sales tax exemption for Florida taxpayers during 2007. One easy way to put thousands of dollars back into taxpayers’ pockets would be to reinstitute the state sales tax exemption for states like Florida, Texas and Tennessee, states whose citizens are disadvantaged by the federal tax code since they do not pay state income taxes. Fairness dictates that the federal tax code should treat American citizens equally, and passing the state sales tax exemption will make Florida whole and put millions of dollars back into our economy. I am currently drafting a Florida delegation letter to Speaker Pelosi and Chairman Rangel outlining the need for a renewal of the exemption and that such a renewal be added to the very next tax package that comes before the House.
“Our economic stimulus package should go to those struggling to keep their homes, whether it is the result of losing their job, or as it is in my district, having to pay the 500-700% increase in their homeowner’s insurance rates. Tax rebate checks should go to American taxpaying citizens, not foreign citizens and nationals who don’t pay into the federal treasury. As this bill goes forward, we must address the need for state sales tax deduction renewal and targeted relief for senior citizens who make too much to qualify for rebate checks under the current legislation. I call on the Senate to improve the stimulus package as I have outlined above, and look forward to it coming back to the House for final passage after my concerns have been addressed.”
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