BUSINESS GROUP OPPOSES GUAM TAX PLAN

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By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (February 22, 2002 – Pacific Daily News)---Five Guam business organizations are taking a united stand against Gov. Carl Gutierrez's proposal to raise the Gross Receipts Tax by 50 percent and suspend small businesses' exemption from certain GRT payments.

''The tax increase will force businesses to either increase prices, lay off more workers or cut worker pay, even more, weakening a local economy already in recession,'' according to a statement issued by the Committee to Get Guam Working.

The association is made up of the Guam Chamber of Commerce, the Guam Hotel and Restaurant Association, the Japan-Guam Travel Association, the Guam Employers Council and the Guam Contractors Association.

Simon Sanchez, executive director of the Committee to Get Guam Working, issued the statement on behalf of the committee, organized last year as a political action group aimed at creating a private-sector voting bloc.

The governor proposed the tax increase and a 10-percent across-the-board pay cut in the Government of Guam to make up for a projected $60 million budget shortfall. GovGuam plans to spend $431 million this fiscal year but expects to collect only $371 million.

The governor proposed raising the GRT from 4 to 6 percent, a move that would have to be approved by the legislature.

The proposals will hurt -- rather than stimulate -- the local economy, the committee said.

''Government and private-sector employees already facing pay cuts will face a 'double whammy' of lower pay and higher prices,'' it stated.

The committee offered alternatives to the governor's tax increase and across-the-board pay cut proposals:

''While across-the-board budget and pay cuts reduce costs, this approach still fails to prioritize government spending,'' according to the committee.

''Not all government services are equally important. Less important services should face deeper cuts or be eliminated to protect the essential services, particularly education, public safety and health,'' it stated.

''GovGuam must move quickly and decisively to prioritize essential spending,'' it added.

The private sector has been dealing with the recession for years, the committee said.

While the economic recession prompted the private sector to shed 4,240 employees last year, GovGuam payroll grew by 140 jobs during the same period, Guam Department of Labor statistics show.

For additional reports from the Pacific Daily News, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Pacific Daily News (Guam).

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