GOVGUAM REVERSES TAX REFUND FREEZE

admin's picture

‘It’s not our money’ says governor

By Brett Kelman HAGATNA, Guam (Pacific Daily News, Jan. 14, 2011) – In Guam, the Department of Revenue and Taxation started paying out tax refunds yesterday morning, despite the government's dire financial situation, because the money isn't the government of Guam's to keep, Governor Eddie Calvo said.

Calvo announced that he had ordered the agency to restart the refund payment process, prioritizing emergency requests, during a Rotary Club of Guam meeting midday yesterday.

Calvo said his staff had just discovered that a hold had been put on all tax refund payments in the "waning days of the past administration," about four weeks ago. The new governor said he immediately reversed that ordered because, although GovGuam is desperately strapped for cash, the refunds don't belong to the government.

"How can you on one hand give everyone a raise, which I want to give everyone, wants to give a raise to hardworking folks but if you do that and you sacrifice giving out tax refunds, I see a bit of a conflict there, Calvo said. The tax refunds those just aren't our money," the governor added.

According to the Calvo administration, the government of Guam is looking at a cash shortfall of about US$116 million, and owes more than US$285 million in tax refunds. The longer GovGuam waits to pay the refunds, the more it will owe in interest and the larger the government's already sizeable debt grows, Calvo said,

The government's financial challenges prompted Calvo to suspend recently installed raises for thousands of employees on Wednesday, but it did not stop him from reinstated tax refunds the next day.

Acting Revenue and Tax Director John Camacho said Wednesday that all tax refund payments had been on hold for three weeks when he took over the agency last week, and he maintained the hold until Calvo ended it yesterday.

But before news spread that tax refunds had been reinstated, Sandy Estevez was working at the courthouse frustrated.

Estevez, a maintenance worker at the Judiciary of Guam, said he and his wife counted on the tax refund, and although he understood why tax refunds had been halted, this felt like just the latest cycle in GovGuam tradition of failing to pay out to everyone equally.

Estevez also questioned if Calvo had cut deep enough.

"I think the governor has his heart in the right place, Estevez said. But I'm not sure it's going to work I don't think cutting the tax refund (payments) and the wage increases is going to be enough. I kind of feel bad for him."

Calvo released a press release later in the afternoon, formally announcing the return of tax refunds.

"This is not the government's money, it's the people's money, Calvo said in the press release. I'm very concerned that payments stopped in the weeks before we came to office. We have an obligation to prioritize those who are struggling and need this money most. We're not going to forsake the less fortunate during this cash crisis. They're our priority, along with school children, the elderly and hospital patients."

GovGuam traditionally struggles to pay out tax refunds on schedule and often falls years behind because of limited cash flow. Currently, Revenue and Tax is trying to pay refunds from 2007, Calvo said.

Last October, weeks before Calvo was elected, the then-candidate said he planned to pay off all tax refunds by the end of his first term, "if not sooner."

Rate this article: 
No votes yet

Add new comment