Tax Refund Payments at Highest Levels in History
Calvo wants Legislature to budget for Hay raises
A recently-completed report shows the average annual payout of tax refunds (without bond funding) for the previous four years was only $57.9 million. That pales in comparison to what has been paid already for this fiscal year for tax refunds: $103 million. This surpasses every record of annual tax refund payments in GovGuam history.
One fiscal year, FY2009, only $32.7 million was paid, even though the Provision for Tax Refunds in that budget was $100 million.
“What this shows us is that the book entry the Budget Act makes for tax refunds in the annual budget doesn’t make a difference. It’s the revenue projections that count. If the projections are too high, then the administration won’t have enough to cover everything, including refunds,” budget director John Rios said.
The $103 million paid so far for tax refunds also includes payments for previous years’ refunds filed only this fiscal year. It also includes payments made between October 1 and December 31, 2012.
This calendar year, the administration has already paid about $80 million in tax refunds for Tax Year 2012 refunds. About $25.5 million (Status A) is left to pay for Tax Year 2012 refunds. All of those will be paid between now and October. This means the total amount for Tax Year 2012 refunds is about $105 million.
The administration bumped up the Provision for Tax Refunds for the upcoming fiscal year (2014) to $113 million to be sure enough is stored away for tax refunds next year. This is $8 million above what we’re paying in the current year.
“Based on historical data, there is no need to bump up this provision to $129 million, especially when that difference can pay for the Hay raises for the employees,” Rios said.
