Adelup continues to be selective about the information it releases as it tries to build a pile of cash it can use at its discretion. They are quick to use the tax cuts to justify the need to increase the business privilege tax (BPT), but conveniently ignore the other side of the equation – the expected increases in BPT collections as a result of a $67 million cash injection into the community.

This cash injection and resulting BPT collections could dramatically reduce the revenue gap facing the government of Guam. So until we get that number, we still don't have enough information to decide how much to raise the BPT, if any amount at all.

So rather than take time to evaluate the full impact that the tax cuts would have on spending in the community, the governor wants to do a pre-emptive strike in the form of a 50-percent increase of the BPT. ...


Hardship for families

There will be a lot of collateral damage as a result of raising the BPT in a weak economy. As it is, many families struggle to make ends meet. Raising the cost of everything will only make the quality of life poor for most of Guam’s families. Families barely surviving on one income will find themselves needing a second. Families barely surviving on two incomes will find they need a third.

Already the exodus of young people looking for better job opportunities and a lower cost of living is beginning to accelerate, but now there is a twist. I am talking with senior citizens selling their homes to relocate to areas with a lower cost of living.

BPT increases will damage local businesses. Already, $300 million and $500 million of local retail sales escape taxation through purchases on the military bases or the internet. Any increase in BPT will drive more sales to the bases and internet, further damaging local businesses to the point many will close. As small businesses close, there will be a geometric reduction in the amount of BPT, payroll withholding, and income taxes the government collects.

Even worse, there will be an increase in unemployment on an island with no social safety net.

Burden on taxpayers

Back in my consulting days, I used to ask my clients, “Why is there never enough time or money to do things right, but always enough to do things over?” That certainly applies to this situation, because politicians have seen this problem coming for years and did nothing to make changes while they had the time to do so without dramatic negative impacts on our community.


Now in a matter of days, with no effort to reduce costs or gather data to better manage limited financial resources, politicians want to take the fast and easy way out of the problems they created, and have taxpayers bear the full financial burden.

In the words of Andri Baynum, I, too, say: “No way!”


Ken Leon-Guerrero is the spokesperson of Guam Citizens for Public Accountability (www.guamc4pa.org).


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