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Officials grilled over tax credits

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OFFICIALS from the Department of Administration and the Department of Revenue and Taxation were grilled yesterday during a public hearing on GovGuam’s controversial tax credit program, with some senators asking about the inconsistencies in the reporting of the amount of tax credits redeemed by the Layon landowners.

During the hearing, Rev and Tax Director John Camacho provided a summary of the tax credits issued starting August 2013.

Camacho reported the following numbers: approximately $487,000 for August; $554,000 for September; $468,000 for October; $522,000 for November; $611,000 for December; and $617,000 for January.

But Vice Speaker Benjamin Cruz, who raised questions about the tax credits authorized for or redeemed by the Layon property owners, said the numbers did not add up.

He said the governor's office estimated that $2.9 million was claimed earlier this year, but the response issued by DRT to his Freedom of Information Act request indicated that as of Feb. 28, the amount was $3.3 million.

Camacho stressed that the figures reflected point-in-time data on the credits issued.

"Right now it could be more than $3.3 million. If they run the reports and they find that these people are taking more credits, then the numbers are going to change," he said.

In a March 12 FOIA request, Cruz asked both DOA and DRT to provide him the amount owed and accrued interest as well as the total amount of tax credits claimed, transferred or authorized for each former Layon landowner who received tax credits in lieu of cash payment.

Cruz questioned the impact of the tax credits on Healthy Futures funds, asking if both DOA and DRT issued a report on the status of the funds.

Camacho reported that of the $3.3 million tax credits, around $2.2 million was applied toward tobacco taxes and $118,000 for alcohol taxes.

Benefits

DOA Director Benita Manglona earlier during the oversight hearing said the Legislature's efforts to create the tax credit program enabled the executive branch to pay down debts, or enter into partnerships for projects.

Referring to the Tax Credit in Lieu of Cash Payment program created by Public Law 14-69 in 1977, she said GovGuam cannot make the cash payment for the cash acquisition of privately owned land due to the unavailability of revenue.

Manglona said tax credits are viable solutions that allow the government to pay down its liability such as the Layon landfill, which is accruing interest at about $100,000 per month.

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