Governor, Guam
If we care about our kids’ classrooms, our hospital beds, our police officers and firefighters, then we must care about Bill 11-38 because it puts all of that at risk.
As your Governor, I cannot stay silent on a measure that would take us backward. Bill 11-38 proposes to cut the Business Privilege Tax (BPT) from 5% to 4%. On the surface, that might sound like a win for consumers. But if we look closer, we see the truth: this bill threatens the very foundation of the public services we all depend on.
Here’s the reality: Nearly 90% of Guam’s businesses pay 3% or less in BPT. In 2023 alone, businesses claimed $3.5 billion in tax exemptions, resulting in a staggering $175 million in lost revenue. Add that to $9 million in reductions for small businesses, and we’re already looking at $184 million in tax breaks. This new proposal would add another $80 million loss annually. That’s nearly $265 million less for education, healthcare, public safety, and road repairs.
Let’s be clear: these aren’t just numbers—they represent services that touch every part of our lives. With the revenues we’ve protected, our administration has expanded critical services. We’ve graduated and deployed more police officers to protect our neighborhoods. We launched Guam’s first-ever paramedic program to bring emergency care directly to those in crisis. We raised wages for our teachers, nurses, and law enforcement officers—not just to retain them, but to recruit others into these vital roles. Additionally, we returned a portion of those funds back to the people with over $130 million in power credits to help families and ratepayers manage rising utility costs, and we reduced gas prices at the pump by waiving the Liquid Fuel Tax.
We’ve tried this before. When the BPT was lowered in the early 2000s, prices didn’t drop, and families didn’t feel relief. In fact, their purchasing power got worse. And today, with inflation already squeezing households, reducing this tax won’t help consumers, but it will gut our ability to serve them.
Let’s not forget why the BPT was raised to 5% in 2018 in the first place: to make up for the federal Tax Cuts and Jobs Act of 2017, which stripped away revenues from our local government. Those federal cuts are still in place, and Washington is now proposing even more. If that happens, Guam could lose over $700 million this fiscal year and nearly 800 jobs. This is not the time to gamble with our fiscal stability.
We are in a period of growth. Military investments are surging. We should be using that momentum to strengthen our island, not hollow it out with policies that disproportionately benefit large contractors while leaving our families behind.
I’ve said it before: good government means making responsible decisions, even when they’re hard. Cutting taxes without a plan to replace the lost revenue is not responsible. It’s risky, and history has shown us just how much we stand to lose.
In conclusion, I urge our lawmakers to consider the long-term implications of reducing the Business Privilege Tax. The impacts extend far beyond business profits; they threaten our very fabric of public services and the economic stability of Guam. Let us make decisions that empower our future, rather than compromise it.