SIX senators from the Legislature’s Republican Caucus recently forwarded a letter addressed to acting Gov. Ray Tenorio expressing their concern over the $100 million gap for tax refunds in the recently passed budget.
The letter, signed by Sens. Frank Blas, Aline Yamashita, Tony Ada, Chris Duenas, Sam Mabini and Mana Silva Taijeron, stated: “It is our understanding that the provision for tax refunds allotted for a given fiscal year is the money that should be deposited into the Income Tax Reserve Refund for payment the following calendar year.”
Furthermore, the letter stated: “In this case, the provisions collected in Fiscal Year 2013 should be for payment of tax year 2013 refunds beginning January 2014.”
However, the letter pointed out, “The budget plan will use the FY2013 provisions instead to fund tax year 2012 refunds.”
The budget plan, according to the letter, “dedicates $14 million to pay down the tax year 2011 refunds, and that the $100 million provision will be for tax year 2012 refunds.”
The signatories acknowledged that the amendment to the Income Tax Refund Reserve Fund law in June permitted this. “However,” the letter stated, “this revision does not negate the fact that this government must act responsibly and set aside the $100 million for tax year 2013 throughout Fiscal Year 2013.”
The letter further stated that the “District Court is prepared to issue a permanent injunction forcing the government to pay into the reserve fund.”
Moreover, the senators said they are deliberating on several solutions to address the $100 million gap in the budget, “including an immediate review of the Omnibus Fiscal Reform Act of 2012 to find revenue enhancements and looking at prospective revenue enhancements from the implementation of the fee schedule at the Department of Mental Health and Substance Abuse.”
“The bottom line,” the letter concluded, “is that we need to find an additional $100 million to put into the reserve fund between Jan. 1, 2013 and Dec. 31, 2013. This will assure our people that, come January 2014, there is money reserved for the immediate payment of their refunds."
According to the signatories, the Republican Caucus will continue deliberating on possible solutions to address the gap since the $114 million proposed in the approved budget will only cover tax year 2012.
