By Ben Pangelinan
For Variety

WE all know that feeling of elation we experience when we find a solution to a problem. The satisfaction of accomplishing something. It is especially rewarding when the solution is far reaching and positively affects people’s lives. For me, this is the best benefit of being in public service.
The converse is the dejection of seeing a solution that seems easy enough to implement thwarted. In developing and passing public policy, it is even more depressing when the law is simply circumvented.
This is what transpired with Public Law 26-74, which created the Income Tax Refund Efficient Payment Trust Fund. If the law was implemented, it would have ensured that cash is deposited into the trust fund to pay tax refunds owed to taxpayers who overpaid their taxes when they filed their returns and wouldn’t have to wait for years, like they do today. It seemed simple enough.
A large portion of the money that pays for the provision of government services comes from the withholding taxes that every employee pays every pay period. Other income taxes are also collected when the employee files his tax return and make payments for taxes owed. Other sources are penalties and interests for non-payment of taxes, gross receipt taxes, fees and licenses.
In deciding how much money to appropriate for government operations, the Legislature receives the estimated revenues for the year from the governor. This is gross revenues.
From the gross revenues, we first deduct the estimated amount set aside for the payment of income tax refunds. The amount set aside for tax refunds in FY 2007 is a little over $72 million. The second deduction is the amount of our debt payments for all the bonds and other loans. The remaining revenues are then prioritized for education, health, safety and the other appropriations to the various departments, agencies and programs.
Public Law 26-74 requires the Department of Administration, as the keeper of the accounts and the custodian of government’s cash, to deposit a portion of the gross revenues collected into the Income Tax Refund Efficient Payment Trust Fund for income tax refunds within 10 days.
In reality, what is currently happening is that the cash is not deposited and instead is used to fund the operations of the departments and agencies. Tax refunds are not being paid and its first position has moved to the end of the line. This is the reason people wait for years for their refunds. Instead of putting the cash into the income tax trust account to return to the people who are owed refunds when they file their returns, it is used for such things as pay raises that are not part of the budget and other priorities.
We tried to keep the first position of income tax refunds by depending on the Executive Branch to follow the law. Sometimes they did and sometimes they didn’t when it came to income tax refunds.
Not to be daunted by this initial failure, I recently introduced Bill 53 which will now require that any time a taxpayer makes a tax payment, a portion of every payment is deducted and deposited immediately into the Income Tax Refund Efficient Payment Trust Fund. Only the tax commissioner, who is entrusted with the money to pay refunds owed to the people, can take out the cash and only for the payment of tax refunds.
For this to work, it requires the governor and the Legislature to be truthful in the revenue estimates and the budget process. This has not happened in the past. Bill 53, when passed, is the first step in making the structural change needed. We must keeping working to see this come about.
If at first you do not succeed, you just have to try again.

Ben Pangelinan is a senator in the 29th Guam Legislature and a former speaker now serving in his seventh term in the Guam Legislature.
E-mail comments or suggestions to senbenp@guam.net or ctzenben@ite.net.