The Guam Daily Post

12 23Fri11272015


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Back Local News Substituted budget bill tackled

Substituted budget bill tackled

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FOR the second consecutive day, lawmakers tackled Bill 38-32, focusing on the substituted version filed by Sen. Ben Pangelinan, who chairs the committee on appropriations.

The substituted version takes into consideration the $35 million shortfall identified in the earlier version of the executive budget submitted to the committee on appropriations and the Office on Finance and Budget.

Moreover, provisions of the substituted bill also emphasize the prioritization of paying tax refunds for tax year 2013 and prior years up to around $129.66 million.

The legislation increases the provisions for income tax refunds from the $113 million submitted by the governor to $129.66 million – as estimated by the Department of Revenue and Taxation.

However, during the budget hearing, Department of Revenue and Taxation Director John Camacho said they would be comfortable with the earlier allocation of $113 million.

Speaker Judith Won Pat asked what the administration’s plans are in terms of addressing the need to prioritize paying tax refunds should they stick with the $113 million instead of the $129.66 million proposed in the substituted bill.

Budget and Management Research Director John Rios said in addition to the Legislature’s authority to appropriate more money to pay for tax refunds, there are also other management tools within the executive branch such as the 15 percent reserve or spending cuts that can be used to pay for the tax refunds – if it exceeds the allocation.

“But it is a priority of the administration to pay for the refunds,” Rios stressed.

Last fiscal year, Rios said, the de-appropriation for the reserves strapped a lot of departments and they ended up releasing some of the reserves.

Once the budget is finalized, he added, they can decide what percentage to apply for the reserve.

Department of Revenue and Taxation reported that as of Aug. 1, there is an estimated refund liability of $54.6 million for FY2012 and prior years. In July, DRT said it was $67 million.

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