Governor vetoes sales tax repeal

VETO: Gov. Eddie Calvo vetoes the sales tax repeal bill Friday in Adelup. Dontana Keraskes/The Guam Daily Post

Gov. Eddie Calvo Friday vetoed Bill 262-34, which would have repealed the 2 percent sales tax due to take effect on Oct. 1.

During a midday press conference he “implored” lawmakers not to override his veto and urged them to leave the current 2 percent sales tax law in place, or to adopt other revenue raising measures, in order to avert the coming fiscal crisis.

If his veto is overridden, and no other revenue is raised, the governor warned the legislature “will drive this government bus and this island economy off a cliff.”

He called passage of the sales tax repeal earlier this month “down right irresponsible” and “practically a crime ... committed against the people of Guam.”

He thanked senators Wil Castro, Louise Muna, Tommy Morrison and Speaker Benjamin Cruz for voting against the repeal saying they understood that “we can not cripple this economy and throw thousands of people out of jobs.”

The governor called on the other lawmakers who voted for the repeal to reconsider saying, “this is a crisis that (can) easily be averted.”

"Sustain my veto," he said, and "then work with Speaker Cruz to ensure that there is a budget that will provide the necessary resources" for the next fiscal year.

Override vote postponed

In reaction, Sen. Michael San Nicolas, who introduced the repeal bill, said, “We will do our duty. Arrangements for an override vote are underway, to spare our people of this sales tax burden."

Within an hour after the veto, Speaker Benjamin Cruz called a 4 p.m. emergency session to conduct an override vote.  10 senators are needed to override a veto by the governor.

However the emergency session adjourned in less than 15 minutes after Senator Frank Aguon Jr., objected saying the required written declaration explaining the need for an emergency session had not been given.

"If you insist on a written notice," said Speaker Cruz. "I will write a written reason for the emergency and call session after that."

No new date for the override vote has been set yet.

Veto message

In his veto message, the governor blamed the legislature's prior vote to repeal the sales tax on “the obvious inexperience of freshman senators like Regina Lee and Fernando Esteves.”

He also questioned the “personal motives” of senators Michael San Nicolas, Frank Aguon Jr. and Dennis Rodriguez Jr. who are campaigning for higher office.


“With shocking disregard, the senators have callously turned their backs on the hospital, the schools and their government in order to further their own interest,” states the governor.

“I am proud to veto Bill 262-34,” he wrote. “It is the most self-serving and irresponsible bill that has ever been passed by any legislature.”

Background

Sen. Michael San Nicolas introduced the repeal measure moments after his colleagues narrowly voted to approve the sale tax on March 15  by a vote of 8 to 7.

However, in the wake of a series of reports of taxes that had gone uncollected, and revenue collection agent positions that had gone unfilled, the tide turned against the sales tax, and on July 2  senators, by a veto proof margin of 11 to 4, voted to repeal it.

The governor called that vote "a dark day for the people of Guam."

The repeal left the government of Guam with no new revenues to make up for what the fiscal teams at Adelup and the Legislature have projected will be a $145-million deficit in the new fiscal year that begins on Oct. 1.