Hagåtña, Guam – The Office of the Governor today expressed strong disappointment regarding the Republican Majority’s defeat of a crucial amendment aimed at providing significant tax relief to small businesses while maintaining the current Business Privilege Tax (BPT) rate for larger corporations. The amendment, proposed by Senator Sabina Perez and supported by other Democrats and lone Republican Senator Telo Taitague, was unfortunately voted down by the Republican Majority during recent budget deliberations.
The defeated amendment sought to give even more small businesses much-needed economic support. Crucially, it would have kept the BPT rate at 5% for the top 15% of businesses on Guam, those earning $2 million or more annually, while cutting BPT for nearly everyone else.
The defeat of this amendment is a clear indication of where the priorities of the Republican Majority truly lie. While our administration has consistently advocated for policies that uplift our local small businesses, the Republican-led legislature has once again prioritized large corporations, including multi-million dollar off-island entities engaged in military contracts, over the locally owned small businesses, which are the backbone of our local economy.
The administration has been a vocal opponent of the Republican Majority’s broader push to significantly cut business privilege taxes, arguing that such reductions disproportionately benefit large businesses and will severely cripple essential government services. Despite the administration’s concerns, the Republican budget includes a reduction of the BPT from 5% to 4.5%, with an additional amendment passed to further cut the rate to 4% in the next fiscal year.
We have seen this play out before. Past BPT cuts have not translated into reduced prices for consumers, as evidenced by consumer price index data. These tax breaks are not about benefiting the average resident. They are about padding the profits of big businesses at the expense of vital public services.
This comes at a critical juncture for GovGuam, which faces an urgent need to expand its services to meet the growing demands of the Guam military buildup. The Department of Defense itself, in its Final Environmental Impact Statement for the Guam Military Buildup, explicitly stated that the Government of Guam would need to hire more personnel to keep pace with the population growth anticipated from the buildup.
To deny our government the necessary resources to support our growing population, while simultaneously pushing through tax cuts for the wealthiest businesses, is fiscally irresponsible and detrimental to the well-being of our community. We urge the people of Guam to recognize this disparity and hold their elected officials accountable for policies that truly serve the best interests of all residents, not just a select few.
Senators Sabina Perez, Therese Terlaje, Chris Barnett, Will Parkinson, and Tina Muna Barnes voted in support of the amendment. The senators who voted against the amendment include Speaker Frank Blas, Vice Speaker Tony Ada, and Senators Chris Duenas, Shawn Gumataotao, Shelly Calvo, Jesse Lujan, and Sabrina Salas-Matanane. Absent from the vote were Senators Vince Borja, Joe San Agustin, and Telo Taitague; however, Taitague spoke in favor of the amendment during deliberation.
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