Guam Tax Refunds For 2011 May Be Fully Paid Before July

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Governor hopes to free up $93 million to pay out residents

By Jerick Sablan

HAGÅTÑA, Guam (Pacific Daily News, June 1, 2012) – Most tax refunds owed to Guam taxpayers for the 2011 tax year may be paid in the next few weeks.

Gov. Eddie Calvo yesterday said he will ask the Legislature to pass a bill so about $33 million in tax refund money that has been set aside by law for next year will be used for tax refunds owed this year.

If the Legislature agrees, the total amount of money available for tax refunds will be approximately $93 million. That means most of the estimated $105 million in refunds owed for the 2011 tax year would be paid.

About $60 million will be available for tax refunds as soon as next week, as a result of the local government's latest borrowing from the bond market. The bond money is expected to be electronically transferred into a government of Guam bank account by Wednesday. Tax refund checks could be released in the mail as soon as next Friday, the administration has stated.

The governor said his staff members are working on legislation, which could be sent to the Legislature in a few days, which would seek to authorize use of the reserve fund for immediate tax refund payments. The legislation would seek to amend local law to free up about $33 million from a tax refund reserve fund.

Sen. Ben Pangelinan has asked the administration to use the money for tax refunds owed this year, but the governor said yesterday it would take a change in law for his administration to be able to do so.

Some Democratic senators and the Republican governor's office have had public rifts recently. The most recent was Pangelinan saying the governor stood quietly while the Guam Memorial Hospital board allegedly singled out TakeCare health insurance company over an issue of denial of coverage. SelectCare, a Calvo-family-owned health-insurance company, and two other local health insurance companies, also have business agreements with GMH.

Calvo, in a previous statement, called Pangelinan's statement a "malicious attack" in an election season. Incumbent senators are up for re-election this year.

Senator support

Sen. Judith Guthertz last night issued a news release to state she would "immediately offer legislation" to free the money being held in reserve. "I think it is prudent for us as a government to clear any debts owed to our people and I support Gov. Calvo's call for a clean slate with regard to the payment of all tax refunds owed for 2011."

Majority leader Sen. Rory Respicio said he supports anything that would give tax refunds back to the people. "The Legislature is very receptive to pay out all tax refunds and we will do whatever is necessary to get the $33 million out as quickly as possible," he said.

Respicio said he's happy to see Calvo was retracting his former position and agreeing to use the reserved tax refund money for refunds that are owed now.

The governor said it was the Legislature that required the reserve fund be set aside for tax refunds for next year.

Shopping money

The island's business community is hoping for an economic boost, as tax refund checks are expected to give taxpayers more shopping money. Some local car dealerships are preparing for the release of tax refunds by offering sales and specials.

Tom Mazzei, director of sales at Atkins Kroll, Inc. said the company is excited.

"We hope to see an increase in sales in June and July," Mazzei said.

Mazzei said when tax refunds were issued last December, the dealership saw a big spike in sales.

"It was an incredible month for us," Mazzei said.

Mazzei said the tax refunds come at a good time. It will give people who have been wanting to buy cars, but couldn't afford them, money for a down payment.

"The economy has been tough. We have a lot of loyal customers and this will give them an opportunity to buy our product," Mazzei said.

Tom Akigami, marketing manager at CarsPlus, said the Maite dealership hopes the tax refunds will bring more customers to its car lot.

"We feel positive about it. We had a successful campaign back in December and we're bringing it back," Akigami said.

Akigami said he hopes refunds will lead to business picking up.

"We're hoping this sparks things up for consumers to spend," Akigami said.

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