AT LAST count, some entrepreneurs may need as many as 15 governmental agency clearances just to get a business license.
Additionally, a new business must also comply with a myriad of zoning, employment, environmental and permitting regulations. It is not uncommon for a Guam business to spend tens of thousands of dollars in fees, permits and consultant costs before it opens its doors and makes its first sale.
While we can all agree that the safety of employees and customers and the protection of our natural resources cannot be compromised, surely we must also realize that the cost of regulation can be lower – much lower. In my two years in the Legislature, I've sat through two rounds of budget hearings and sessions. In many of these meetings, I've come to wonder if the only purpose for permitting fees is to keep the regulators employed.
Guam corporations pay income taxes based on federal income tax laws. In calculating income taxes for a corporation, the business subtracts its allowable expenses from its revenues to arrive at its taxable income. If the allowable expenses exceed revenues, the corporation incurs a loss. Corporations pay no income taxes on losses! Furthermore, Guam tax laws allow corporations to use these losses to offset future years' taxable income. Every dollar that government regulation contributes to the expenses of a corporation results in taxable income and lower income taxes paid to the government of Guam. The bottom line is that excessive regulation hurts both the private sector and the government of Guam.
Throughout this term, I've been meeting regularly with business, civic and government leaders who have shared their concerns with me. Based on the results of some of these meetings, here are some of the economic growth initiatives that I would like to see done in the near future:
- Simplify the vehicle registration process, beginning with new vehicles;
- Eliminate the requirement for safety inspections during the first three years of a vehicle's life;
- Put time limits on various permitting processes;
- Expand the fiscal note scope to include the financial impact of legislation on businesses and private citizens; and
- Eliminate all unnecessary costs for broadband Internet deployment on public rights-of-way.
On the government's end, I'd like to see the following happen:
- Find better ways to update property valuations for real property tax assessments;
- Quantify the costs to the government of Guam of paying Earned Income Tax credits to citizens of the Freely Associated States;
- Require government agencies to post their bid specs online so prospective bidders need not pay to see the specs;
- Encourage the Department of Defense to use UOG and GCC rather than the University of Maryland and Pepperdine University for education opportunities for troops stationed on Guam;
- Require the Department of Administration to post all payments for prior year obligations and unbudgeted expenses; and
- Preserve Guam capital by providing incentives for physicians in critical specialties to practice on Guam. Doctors in California and Manila don't pay taxes on Guam or employ Guam residents.
These are just starters. There's much more we can do to make Guam business friendly so we can grow our economy. A strong economy will provide the resources that GovGuam needs to provide essential services like education, public safety and health care.