| <home> -- <press releases> -- <May 6, 2003> Congresswoman Bordallo Raises
Concerns FOR IMMEDIATE RELEASE – Thursday, May 6, 2003 – Washington, D.C. - Congresswoman Bordallo today joined three of her Democratic colleagues, Frank Pallone, Jr. of New Jersey; Tom Udall of New Mexico; and Sherrod Brown of Ohio; in raising concerns about President George Bush’s proposed tax cuts. Among the concerns raised by the Congresswoman were Guam’s current budget deficit and the impact that these tax cuts would have on the island’s economy. “In addition to lacking revenues to meet the basic needs of our community, future generations will have to shoulder the burden of excessive bond deficit and high interest repayment rates,” Stated the Congresswoman. Because Guam’s tax code follows the mirror tax code, any tax cuts enacted on a national level would be applicable to Guam as well. During her statement, Congresswoman Bordallo released the findings of a special report prepared by the House Committee on Government Reform, which details the direct impact of the proposed tax cuts on the economy of Guam. According to the report, which was prepared at the request of Congresswoman Bordallo based on data provided by her staff and the U.S. Census Bureau, the proposed tax cuts would cost an estimated $38 million in Fiscal Year 2003 alone, which represents nearly 10 percent of the Fiscal Year 2004 budget projections. Commenting on the distribution of the proposed tax cuts, Congresswoman Bordallo elaborated on the findings of the economic report. “While these funds theoretically provide Guam taxpayers with tax relief, the report demonstrates that the average tax cut for the bottom 56% of Guam taxpayers would be $199,” noted the Congresswoman. “The average tax cut for the top 2% of taxpayers on Guam would be $13, 935. In fact, the top 2% in the household income category would receive a disproportionate 21% of the total tax cuts.” The loss of these substantial revenues for GovGuam would be yet another blow to the island’s budget crisis. Earlier this week, Standard and Poor’s downgraded Guam’s bond credit rating from “BB” to “B,” citing Guam’s ability to cover its large budget deficit. This reclassification places GovGuam’s creditworthiness into a moderate to high-risk category, which translates into higher interest repayment rates for any money that GovGuam borrows. While the Congresswoman did not discount the merit of using certain tax breaks as a tool for stimulating the economy on Guam, she cited other possible avenues for rectifying the island’s fiscal crisis. ###
Contact: Neil Weare
in Washington, D.C., at (202) 225-1188 or Joaquin
Perez in Guam at (671) 477-4272. |
