GOVERNOR to DEM. SENATORS: Let us pay tax refunds; work with us
“This suit by the Democrat majority is wasting time and resources. This is time and resources that could be spent on refunds, or any other service of the government. Instead, it is being spent to satisfy the insatiable appetite of the Democrats to score a political point against Governor Calvo. We hope the court and the people see right through this for what it is.” — Franklin P. Arriola, Governor’s Chief of Staff
The Democrats in the Legislature are suing the Governor for paying tax refunds. Not only does their lawsuit:
a.              Waste taxpayer resources to again oppose the Governor for paying refunds, it also
b.              Cannot be a matter for declaratory judgment since the Legislature admits theGovernor is actually depositing money into the fund it is suing him over; and
c.              Brings to light that the restrictions they’ve placed on the Governor to pay tax refunds not only makes it harder to pay the refunds, it is inorganic.
These were the main points Governor’s Legal Counsel Sandra Miller and co-counsel Arthur Clark (Governor’s Chief Policy Advisor) raised in their recently-filed brief before the Guam Supreme Court. This brief was filed in response to the Legislature’s filing in the declaratory judgment request brought by Sen. Pangelinan and all his Democrat colleagues.
POINT 1: More money was paid into the refund account than the law required       
Claim: The Democrats told the court and the media that the Governor withdrew money from the refund account and did not pay refunds as a result.
Fact: The Fiscal Year 2013 Budget Act required that $113 million be deposited into the Income Tax Efficient Payment Reserve Trust Fund. Governor Calvo deposited $130 million that year – $17 million more than the Legislature required.
Omitted Truth: What the Legislature fails to bring to the Supreme Court’s attention is that, as of December 31, 2013, rather than being about $16 million short, as the Legislature’s math would suggest, all deposits required to be made to the Trust Fund had been made–and then some. Since August 2013, the General Fund has been advancing monies to the Trust Fund, and has been in such a position ever since–the only administration to be in such a position since 1994. As of December 31, 2013, the General Fund had advanced the Trust Fund approximately $7 million more than the law required.
POINT 2: No jurisdiction                                                                                                   
Claim: The Legislature is bringing a legitimate question for declaratory relief before the Supreme Court because it is asking about the legality of a Trust Fund it created.
Fact: The law allowing the Supreme Court to make declaratory judgments is clear that the Legislature can only seek judgment on its own powers and duties. However, the Legislature is abusing the statute to try to control an entirely separate branch of government: the Executive. This begs the question as to who or what event leads the Legislature to believe that the creation of these funds has been challenged. Even by the Legislature’s own admissions, the funds have never been challenged by the current or former administrations. The Legislature admits that the current administration not only acknowledges the Trust Fund, but is actually depositing money into that fund.
POINT 3: The local statute is inorganic anyway                                                            
The Organic Act allows the Governor to promulgate rules and regulations consistent with IRS regulations for the Guam Territorial Income Tax administration or collection of taxes, not the Legislature. To the extent that the local statute attempts to regulate, change, or otherwise contradict the Internal Revenue Code, then that local law is inorganic.
MOST IMPORTANT POINT: “The reserve funds that the Governor is being sued over were set up by the Legislature 20 years ago.  In those 20 years, Governor Calvo is the first and the only administration to fully fund the reserve fund and, ironically, the only administration to be sued because of it.  Governor Calvo knows that what matters most to the taxpayers of Guam is that we get them their money back as soon as possible so they can make ends meet. Although we know that some of the Democrats felt that practice of forcing the taxpayers to “loan” the government their hard-earned money should continue, and they would rather owe the people than the banks, we request the Democrats in the Legislature to work with us and stop putting up road blocks to getting the people back their money. We have a lot of work to do. We’d like to concentrate on that work, and not on another frivolous lawsuit. We’d like to pay tax refunds without another objection from the Democrats. We’d rather not owe the people.” — Franklin P. Arriola

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