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Guam Legislature debates FY2026 budget substitute; panel warns tax rollback risks services and federal match
Summary
Senator Masi, chair of the Committee on Government Finance and Operations, introduced bill 44‑38 COR — the FY2026 budget substitute — and the Office of Finance and Budget presented projected revenues and allocations totaling approximately $1.35 billion. Administration witnesses and multiple senators warned that a proposed half‑percentage rollback of the business privilege tax and certain reductions in refund provisions or local matches could cut federal matching funds and reduce support for hospitals, public health and other programs.
Senator Masi, chair of the Committee on Government Finance and Operations, opened floor debate on bill 44‑38 COR — the proposed fiscal year 2026 budget substitute — saying, “we are here today to decide how this government will spend the people's money for the next fiscal year.”
The Office of Finance and Budget (OFB) and fiscal partners presented revenue forecasts and recommended allocations. OFB Director Steven Joseph Guerrero told the committee the package relies on historical trends, current collections and tourism and military activity; OFB put the general‑fund amount available for appropriation at $942,376,702 and the grand total (general fund + special funds + federal matching) at $1,350,915,550. Guerrero noted recent years’ excess collections and that FY2026 projections reduce a long historic spike in refunds and other one‑time amounts.
Guam Bureau of Budget and Management Research Director Lester Carlson and administration staff urged caution about two central changes in the substitute: (1) a proposed half‑percentage rollback of the business privilege tax (from 5.0% to 4.5%), which OFB estimated would reduce revenue by about $41 million, and (2) a lower provisioning level for the gross provision for tax refunds. Carlson said the administration opposes the BPT rollback, presenting an analysis showing roughly 88% of the BPT revenue loss would benefit businesses with more than $2…
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