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TAX refunds will be mailed today after Gov. Eddie Calvo yesterday signed the Series B bond secured at a record low interest rate of 4.6 percent.
After the signing, GovGuam bond counsel Stan Dirks stated in a press conference that the money will be transferred from New York to the coffers of the Bank of Guam.
A total of $93 million worth of tax refund checks will be sent out for tax year 2011 and prior years.
“We are making good on an obligation that has been owed to our people for so many years. We are also setting the direction for this administration, not only when it comes to fiscal stabilization of our government, but I think long past our administration. There are a lot of initiatives that we have moved forward,” the governor said.
He also stated the government received excellent credit ratings despite the fact that many governments worldwide are actually having credit rating downgrades from the rating agencies.
Calvo attributed this to the very prudent revenue forecasting model and fiscal stabilization plan developed by the government.
“We still have a lot to go. It is important that we set a plan of action and we stick to it with regard to ensuring that the government lives within its means so that we don’t have any future taxpayers having to wait multiple years to get their tax refunds. The money that is rightfully theirs should be there,” Calvo said.
Before the governor signed the documents, Dirks asked him if “he is ready to go into debt.”
In total, Calvo signed two documents, including a document containing pertinent information on the bond such as the maturity, interest rate, and the payment plan information. After the necessary requisition has been processed, the bond money will be transferred to the Department of Administration, and eventually released to taxpayers, Dirks said.
However, the work is not done yet, said DOA Director Benita Manglona.
“This is only the beginning. Our work is cut out for us. We still need to rightsize the government. In order to timely pay out this refund, we have to contain costs and look for ways to make sure that we don’t increase the deficit more than what it is now. But we overcame all the obstacles and we are ready to pay the refunds,” Manglona said.
Last Tuesday, Calvo signed into law Bill No. 470, also known as the Income Tax Refund Reserve Fund Bill introduced by Sen. Judi Guthertz. The passage of the bill authorized the release of $33 million in reserve funds to cover tax refunds for 2011 and prior years.