By Mar-Vic Cagurangan
Variety News Staff

SENATOR Judith Guthertz, D-Mangilao, is seeking to raise the appraised value of real property on Guam in order for the administration to cut through the Organic Act’s borrowing limit provision, which is feared to hinder the proposed loan agreement between the government of Guam and the Bank of Guam-led consortium.
“Such a situation would enable the government of Guam to borrow additional money on the market up to the limit of the new appraised property value,” Guthertz stated in a letter to Revenue and Taxation director Art Ilagan.
She said her proposal is meant to “provide a way out of current stalemate” and pave the way for the administration’s proposed loan for payment of the cost of living allowances, as well as the $90 million earned income tax credit settlement.
The proposed loan agreement between GovGuam and the consortium includes a provision which states that “all borrowings or public indebtedness of the government in addition to the borrowing represented by the loan do not exceed the 10 percent ceiling imposed by Section 11 of the Organic Act.”
The proposed $123.8 million loan agreement requires clearance from the Attorney General’s Office and the Department of Administration, certifying that the deal doesn’t violate the debt limitation set by the Organic Act.
The debt ceiling question involving bond borrowing was heard last month by the U.S. Supreme Court. The case is awaiting decision from the U.S. Supreme Court.
“During the bond borrowing hearing before the U.S. Supreme Court, Justice Antonin Scalia commented that GovGuam already has the ability to work around the Organic Act provision that limits GovGuam’s borrowing to no more than 10 percent of the appraised value of real property,” Guthertz said.
“Justice Scalia stated that all that was needed was for GovGuam to increase the appraised value of property on Guam by law and accompany that with a companion decease in the tax property so that property tax bills would remain status quo,” she added.
Guthertz explained that by passing a bill to double the appraised value of all property while cutting the property tax in half, no additional levy would be imposed on property owners “but our borrowing limit would have been increased.” She disclosed a plan to introduce a bill that would lead to that effect.