Senators' spending measures don't match EITC projections

BBMR: The Bureau of Budget and Management Research office is shown Sept. 8, 2021, at the Ricardo J. Bordallo Governor's Complex in Adelup. The bureau is cautioning lawmakers an upcoming EITC reimbursement could be outside of the Legislature's spending authority. A dozen bills have already been introduced that propose to use these funds. David Castro/The Guam Daily Post

Between the recently enacted budget law and a dozen other bills, senators won't be able to fund all of their ideas that use an upcoming federal reimbursement for the earned income tax credit.

The financial benefit to some of the lowest-earning workers on the island traditionally has been paid by the government of Guam. Following a new federal law, the local treasury will be repaid for funding the EITC, beginning this fiscal year.

The average payout of EITC since 2017 has been $53 million, the Bureau of Budget and Management Research reported in fiscal notes for two bills that earmark the reimbursement.

"However, the final amount to be reimbursed for (fiscal year) 2021 has yet to be determined, as well as the timeframe in which the funds will be availed to the government of Guam," BBMR wrote in the notes.

Next year's budget, which lapsed into law over the weekend, projects a $55.8 million EITC reimbursement, and spends $40 million of that amount to help finance the construction of a new health care campus and Department of Corrections facility.

The remaining amount of $15.8 million, according to the budget law, will be used to pay tax refunds.

But lawmakers from both sides of the aisle collectively are proposing to spend more than $62 million across 12 appropriation bills.

Three of these measures received support during a virtual public hearing held Tuesday.

Bill 172-36, authored by Sen. Joe San Agustin, earmarks $3.5 million from the EITC reimbursement to revitalize and renovate the site of the former F.Q. Sanchez Elementary School.

The Guam Preservation Trust, the proposed recipient of the funds, said the Humåtak building has historic value not just due to its local connections but also as a unique structure in the region created by Richard Neutra, a world-renowned modernist architect, who also was involved in the design of the Ricardo J. Bordallo Governor's Complex and Government House.

"Here on Guam, in all of the Mariana Islands, in all of Micronesia, lies the only Richard Neutra-designed building with (its original) integrity," said Joe Quinata, the trust's chief program officer. "This building has the capacity to teach future Guam architects about modernist architecture. And when it is restored, our island and our visitors can learn all of these stories that are part of our cultural heritage."

The village plans to use it to house its mayor's office, senior center and other community spaces. Humåtak Mayor Johnny Quinata confirmed the community is also interested in establishing a charter school at the campus.

Two other measures, both authored by Sen. Frank Blas, appropriate $250,000 each to the Valley of the Latte and Guam Unique Merchandise and Art. Community members supported the proposals, and stressed both organizations' importance to the local economy during and after the COVID-19 pandemic.

None of the senators attending Tuesday's hearing opposed any of the three bills.

Spending authority not guaranteed

The other bills introduced that also propose to spend the EITC reimbursement are:

• Bill 148: $15 million in a revolving, annual deposit to the University of Guam and Guam Community College for scholarships.

• Bill 186: $1.5 million to construct a "southern emergency access boat ramp in Talo'fo'fo'."

• Bill 187: $3.5 million to construct "a sacred burial ground for the re-internment of Guam's ancestral remains."

• Bill 188: $3 million in "direct financial assistance or loan guarantees" to "facilitate the establishment and success" of a slaughterhouse built on GovGuam land.

• Bill 189: $5 million in a revolving, annual deposit to fund "system development charges for single-family residential and agricultural" water and sewer connections.

• Bill 196: $9.5 million to construct, repair and renovate village sports facilities

• Bill 197: $10 million to support the construction of the Student Services Center and School of Engineering at the University of Guam.

• Bill 199: $580,070 to the Public Defender Corp. to fund the Elder Justice Center.

• Bill 200: $10 million for the Guam Visitors Bureau to fund operations, infrastructure improvements and destination development.

None of the bills are guaranteed to be funded, however. BBMR cautioned senators that whether the Legislature can even spend the EITC reimbursement remains to be seen.

"Should the Internal Revenue Service and U.S. (Department of) Treasury avail EITC reimbursements via a trust fund account, those funds would not be subject to legislative appropriation," the bureau wrote to lawmakers.


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