As GovGuam makes payday, senator calls for release of 4K refund checks

TREASURER OF GUAM: A customer is seen at one of the windows of the Treasurer of Guam payment area in the ITC Building in Tamuning on March 31. David Castro/The Guam Daily Post

For government of Guam workers and officials, today's payday will be uninterrupted despite the economic downturn that has cut the jobs and paychecks of thousands in the private sector.

Gov. Lou Leon Guerrero, when asked about GovGuam's state of finances and the status of today's GovGuam payday, said in her press briefing Thursday: "There's no delay in the paychecks. We are also able to provide for the budgets and funding for the operations of all of our government services."

Public health, public education and public safety services will be funded as well as the Judiciary, the Legislature "and the whole government," the governor said. No breakdown in revenues was released.

"We are able to still ... pay for those expenses," she said.

A fellow Democrat, Sen. Therese Terlaje urged the administration to pay out all outstanding tax refunds for the 2018 tax year and all income tax returns filed this year.

Department of Administration Director Edward Birn has said all 2018 tax refunds would be paid by the end of the month.

But that guarantee would come "too late under the circumstances that many taxpayers find themselves in today as a result of the COVID-19 crisis," Terlaje wrote to Birn on April 1.

She also asked that the tax refunds for more than 4,000 processed income tax returns be paid immediately. 

The senator initially wrote to Birn and Dafne Shimizu, the director of the Department of Revenue and Taxation, on March 30.

To Shimizu, Terlaje noted that refunds for 1,741 income tax returns from tax year 2018 were pending by the end of February. The senator said she hoped Rev and Tax could implement a method to process these returns while ensuring the safety of personnel during the COVID-19 social distancing rules. 

The senator noted that at the end of February, 4,398 tax returns had been processed but not paid.

"I realize that your department is working hard to ensure all COVID-19 response efforts are in place and funding secured, but the government of Guam must continue to honor the payment of tax refunds as a priority. It is not sufficient at this point and under the current economic circumstances that the standard for payment of these processed refunds be within six months," Terlaje wrote to Birn.

GovGuam is required to pay refunds within six months after returns are filed. 

DOA has been exceeding that benchmark, according to Birn.

Since the beginning of March, more than 1,500 tax refund checks have been or will be mailed out. 

Moreover, the director noted that tax refunds were an important element, but not the only stimulus initiative pursued amid the COVID-19 pandemic.

Federal aid is anticipated to come, but it is unknown exactly when it will arrive as some mechanisms have to be first set in place.

"Payment of refunds by Department of Administration must be preceded by the processing of these returns by Department of Revenue and Taxation," Birn wrote to Terlaje on March 31.

"We have been paying refunds ahead of the six-months mandate and from the figures available to me, all available 2018 refunds will have been paid by end of April, if not sooner. You may be assured that our cash planning targets this goal," he added.

In response, Terlaje essentially said meeting the mandate was not good enough given current circumstances. She asked that Birn immediately process payment for the more than 4,000 pending checks as Guam waits for federal assistance.

"About $125 million was set aside in each of the fiscal 2019 and fiscal 2020 budgets exclusively for tax refunds. Transfer authority was also made available to the governor to facilitate any additional amounts necessary. In addition, regular deposits to ensure timely payment to taxpayers were mandated by statute as a ministerial duty of your office and affirmed by the Supreme Court as protected for this purpose," she stated. 

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