Senators eager to cut taxes for your relief

Speaker Therese Terlaje is pushing two bills to cut the gasoline tax, and Sen. Jim Moylan introduced another to cut the BPT on liquid fuel. The democrat and republican legislators are starting on Guam what is becoming a nationwide trend: cutting taxes on commodities so the everyday citizen can afford the cost to simply live.

Mr. Moylan introduced Bill No. 290-36 (LS) Thursday to create a two-year Business Privilege Tax (BPT) holiday on liquid fuel. To assure that the savings would truly be passed to consumers, the measure additionally mandates that the BPT be a visible tax when it comes to the purchase of fuel, so that customers would understand:
1. How much of what they are paying at the pumps are associated with the BPT; and
2. If the BPT exemption holds, what is the amount per gallon that they are not charged at the pumps.

“While I certainly commend the measures introduced by Speaker Terlaje, we are hearing the fiscal concerns associated with the two bills,” Mr. Moylan said. “My office has been in discussion with various stakeholders in the industry and feel that Bill 290-36 brings a balance to the table. For one, the savings that consumers would experience would be significant. If fuel today is nearly $6.00 a gallon, the savings alone is nearly $0.30 a gallon. Secondly, according to stakeholders, the fiscal impact is minimal, which can certainly be offset by the surplus the administration has stated they are seeing with collections,” stated Senator Moylan. “Bill 290- 36 deserves a serious discussion with the governor’s fiscal team, as I am certain that all parties want to find reasonable solutions to help with the fuel price quandaries. The measure requires a visible BPT, thus it would mandate the savings from the tax holiday to be passed to the consumer,” added Senator Moylan.

The so-called fiscal problems with Ms. Terlaje’s bills were articulated by Gov. Lou Leon Guerrero’s fiscal team, which cried at the public hearing against lowering the tax so that the administration could continue paying for certain government services, despite the hundreds of millions in federal stimulus dollars sitting in the bank compliments of Congressman Michael San Nicolas.

Among the issues administration officials raised is the dedication of the liquid fuel tax revenue: road repairs. Ms. Terlaje’s Bill No. 261 would, among other tax cuts, cut all the taxes and surcharges on unleaded gasoline. This comes out to about 23 cents in cost savings per gallon of gas, which two of the three gas companies on island committed on paper to pass along to their customers (76 and Shell).

BBMR originally estimated that eliminating the gas tax would decrease Guam Highway Fund revenue by $9.6 M to $10.5 M. However, at the public hearing, they conceded that the actual impact would be only $5.25 million for the rest of FY 2022.

There was discussion at the hearing that a funding source needed to be identified, however, as has been stated at numerous public hearings, legislative sessions, and through the enactment of other bills, the administration’s policy, according to the fiscal team, is to fund Special Fund shortfalls with the General fund. The Speaker emphasized that the government should prioritize the current $61 M in excess General Fund revenues and future General Fund monies to pay for critical services like road repairs, mass transit, and village services.  Funding these services through the General Fund can help lower gas prices for all consumers and small businesses while still maintaining all of the critical government services currently funded by the Guam Highway Fund.

“I absolutely believe that village road repairs, and other critical services provided by the Mayors, Guam Regional Transit Authority, and DRT are important and should be funded but I don’t think our road repairs should be funded on the backs of our gas consumers.  The appropriations to the Mayors, GRTA, DPW, DOA, GPD, and DRT would not be repealed or impacted by these measures.  These bills prioritize our families who are struggling to pay for gas, rent and utilities by removing the local liquid fuel tax and redirect our General Fund revenues so that village road repairs and other critical government services continue uninterrupted,” stated the Speaker.



Leave a Reply

Your email address will not be published. Required fields are marked *