SEVERAL years ago, a dispute between the Guam Attorney General and the governor went all the way to the U.S. Supreme Court, which ultimately reversed the Guam Supreme Court (argued and decided in early 2007). The case had to do with the burning desire of Gov. Camacho – aided and abetted by the Legislature – to borrow nearly $400 million to pay off overdue income tax refunds and other delinquent operating expenses. Sound familiar? Guam AG Moylan refused to sign off on the indenture documents because he believed the loan would breach Guam's public debt ceiling imposed by the Organic Act. ("No public indebtedness of Guam shall be authorized or allowed in excess of 10 per centum of the aggregate tax valuation of the property in Guam.")

The U.S. Supreme Court ruled in Moylan’s favor and in the decision explained why the limitation existed – to avoid "crushing debt" – and cautioned against "legislative mischief" that could circumvent and nullify the limitations and the court's findings by simply manipulating the tax structure to accommodate political agendas.

At the time, assessed valuation was pegged at 35 percent of appraised or market value. The Legislature immediately realized they could artificially elevate the public debt limit by simply changing the assessed value-appraised value relationship, and have since done so several times whenever they or the governor wished to borrow more money. The governor borrowed $243 million last year and another $100 million this year, so far. This would be the fourth such borrowing initiative since 2007, some of it to pay off delinquent income tax refunds owed from 2008 and earlier.

Modifications to the property tax structure culminated in the most recent change to GCA Title 11, which fixes assessed property valuation at 100 percent of appraised value. It would appear they've run out of wiggle room in that direction, though I’d not be at all surprised if they allowed Rev and Tax to assess property above market value. Perhaps they’ve already thought of that. Some assessors in California, with the most confiscatory tax laws in the nation, tried exactly that but lost in court.

In order to avoid property tax increases, concurrent downward adjustments of the tax rates were of course necessary, or disgruntled property owners might otherwise have voted them out of office. What was once a rather straightforward property tax on assessed value of a quarter percent for land and a half percent on improvements is currently seven-eightieths and seven-twentieths, respectively (tax rates of .0035 and .0875).

A concurrent revision to the real property tax law also included all CLTC leased properties, formerly not taxable, in the "aggregate tax valuation" computations, a transparent ploy to further artificially boost the debt ceiling and borrowing authority. Thus virtually overnight, leasehold interests in government-owned CLTC lands are now assessed and taxed and we go another $110 million in debt.

CLT leases have always been subject to levies equivalent to taxes on private property, but the Department of Revenue and Taxation never assessed or collected it. It’s beginning to look like the new CLT assessments are likewise never intended to be acted upon – useful only to deceive rating agencies and bond underwriters as a red herring masquerading as "revenue enhancement." It actually does nothing to broaden the tax base or bring in general revenue because by law, all CLTC taxes must be deposited in a “Chamorro Loan Guarantee Fund” and are not available for general public use or benefit.

Regardless of how this plays out in the months and years ahead, one fact is glaringly, undeniably true: We are inextricably burdened with the "crushing debt" envisioned by the U.S. Supreme Court in Moylan v. the Government of Guam. Consider, please, the more than $8,000 of public debt that you and every family member now owe. Remember in November.