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Over $70 million to be disbursed

By Dionesis Tamondong

HAGÅTÑA, Guam (Pacific Daily News, June 23, 2009) - More than $70 million in tax refunds for residents who've been waiting more than two years for them can expect those checks in the mail by Wednesday or Thursday, Guam's tax director said.

The Department of Revenue and Taxation worked over the weekend to prepare $71,438,919.93 in checks owed to 15,571 residents, said Art Ilagan the tax agency's director.

The actual refund payments for tax years 2006 and prior amounts to $54,447,694. But because the government of Guam failed to pay those refunds on time, the interest on those refunds accumulated to $16,991,225.93, Ilagan said.

The government of Guam had to borrow the money on the bond market to pay up to $112 million in refunds, among other GovGuam obligations.

Retirees and their survivors who've been waiting for their share of the 2006 cost-of-living-allowance settlement also can expect to see their check payments -- a total of about $74.4 million -- in the mail by the end of the week.

Like Rev and Tax, the Government of Guam Retirement Fund and Department of Administration have been working since Thursday, when GovGuam officially received $473 million in bond money, to issue the long-awaited payments.

After the checks for retirees and survivors are mailed out, the Retirement Fund will work on processing checks -- about $9.5 million worth -- for beneficiaries of COLA awardees who have completed their required documents.

All told, more than $155 million in COLA and refund payments will be distributed over the next two weeks. Government officials expect that money to soon be circulating in the island's economy.

With the bond proceeds made available to GovGuam, the tax department has been able to tap that money for another court settlement.

By law, GovGuam is required to set aside 15 percent of monthly tax-refund cash to pay the Earned Income Tax Credit.

The tax credit, which started in 1977, is an incentive to the working poor to keep them in the workforce, but Rev and Tax ended the program locally in 1996, calling it an unfunded federal mandate. Local lawmakers restored the tax credit, but Rev and Tax ended it again in 1998.

Ilagan said his department set aside $10,715,838 for the earned income credit.

After the tax refund checks are sent out, GovGuam will have about $20 million left from the $92 million in bond money slated for overdue tax refunds.

Some lawmakers plan to tap into the remaining amount to pay for more refunds. Legislation has been proposed to include refunds from tax years 2007 and 2008, but Ilagan said there won't be enough to cover what's due for just the 2007 refunds.

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