The first quarter shortfall of $11.25 million, according to a fiscal report provided to the Legislature by Gov. Lou Leon Guerrero's administration, could be the only shortfall of the current fiscal year.
Government officials had anticipated a collection of $230.25 million but received $219 million from Oct. 1, 2020, to Dec. 31, 2020, according to the Consolidated Revenue/Expenditure Report submitted to the Guam Legislature.
A second look at the report shows that the Bureau of Budget and Management Research projects the same shortfall for the remainder of the fiscal year.
That would mean that for the next three quarters of the year, from January to September, government of Guam collections in taxes and all other fees will have to meet projections. This optimism comes at a time when Guam’s primary economic engine, the tourism industry, has yet to restart, and a portion of the business community, which pays business privilege taxes, is still closed.
BBMR Director Lester Carlson said the optimism is based on the federal assistance that was recently received as well as the economy getting back on track as public health restrictions are eased.
“We believe with the opening up of more businesses and the potential move to (Pandemic Condition of Readiness 3) that revenues will slowly increase closer to the adopted levels,” he stated last week.
On Friday, the governor signed an executive order that transitions Guam from PCOR2 to PCOR3 effective today.
Carlson said more economic activity with reduced business restrictions, and the additional pandemic unemployment assistance funds, to the tune of $181 million just released by the U.S. Department of Labor, and the pending Biden stimulus relief plan that Del. Michael San Nicolas spoke about last Friday are all factors in the slightly bullish outlook in spite of the otherwise bleak economic landscape.
“We see a gradual return to normal economic activity,” Carlson said
The Department of Revenue and Taxation recently announced a drive-thru payment lane and other options for people to pay property and business taxes.
When asked if there’s hope that such options would help bump up collections, Carlson said he couldn’t speak on DRT’s goals, but said that “any opportunity to make it more convenient for taxpayers to file/pay/report taxes is a great move given the staff working outside in the elements to put this together.”
He noted that the BPT has been on a decline with adopted levels in fiscal year 2020 at $319 million and collections at $302 million. He noted that this shortfall reflects the COVID-19 pandemic effect.
In fiscal 2020, the same happened with property taxes. The adopted level was $38.4 million and the amount collected, which is subject to audit, was $34.3 million.
However, Carlson said, with respect to property taxes, officials expect collections to be slightly higher in fiscal 2021 at about $35 million.