Questions answered at tonight’s tax refund bill public hearing
April 20, 2017 (Hagåtña) — At tonight’s public hearing on the Governor’s Bill 1 (1-S) the fiscal team noted two main points of the bill:
– It will get tax refunds to people within weeks of filing (so long as their returns are error-free)
– The Tax & Revenue Anticipation Note will save 25% in interest payments.
Evelyn Claros, who leads the governor’s Community Affairs office, testified that her office receives calls everyday from people desperate to get their tax refunds to help pay for funeral expenses, medical bills, utilities and other needs.
Lester Carlson, deputy director of BBMR, added that we’ve all heard stories of people who take advantage of tax refund-guaranteed loans and paying interest rates as high as 12 percent.
Claros said she’s been told some people take that loan, but others are hesitant because they’re quoted interest rates as high as 28 percent and they can only borrow about 70 percent of the total amount.
Adrian Gogue, a resident, said he was on the fence on whether he supported the bill and had some questions, which the fiscal team answered during the hearing.
• Why $75 million: This is the amount that is generally owed from May to September.
• Why 3 years: This allows for a short period to experience the effectiveness of this cash management tool and allows for it to be continued by the succeeding administration without a disruption in the usage of this cash flow tool in getting tax refunds paid within weeks.
• Will the $75 million be used only for tax refunds or will it be used to pay other things: The bill is very clear that these monies will pay tax refunds.
Acting Governor Ray Tenorio closed the hearing thanking the public, senators and the fiscal team for attending and asking questions to better understand the legislation.
“I am hopeful that our senators will work with us,” acting Governor Tenorio stated. “If this bill passes in the timeline we’ve shared, we could have tax refunds paid out by May 31.”
The hearing was shown live on the Governor’s Facebook page. A report of the proceedings of this hearing will be provided to the Guam Legislature for its consideration and deliberation of this bill at the April 28 special session.
