Guam Gov. Lou Leon Guerrero vetoed the 2026 fiscal budget bill Friday, saying she will submit an identical bill with one major change – instead of rolling back the Business Privilege Tax, the $40 million set aside for tax cuts will be redirected to Guam Memorial Hospital.
The budget approved by the Republican-majority Legislature would cut the BPT from 5% to 4.5% on Oct. 1 and further reduce it to 4% on Oct. 1, 2026. As the budget was being debated last month, a fire in the electrical room at GMH prompted a call from senators for the governor to declare an emergency at the hospital.
Last week, the governor called the legislature into special session to discuss bills that would grant her extended emergency powers and address infrastructure for a new medical complex in Mangilao.
Senators convened briefly and sent the bills to a committee for hearings.
In a video address Friday, the governor said the bills would have given her “the legal tools to act, tools to repair failing electrical systems, pay the power bills and keep our patients safe.”
She said the senators “could have debated those bills. They could have amended them. They could have rejected them entirely, or offered their own in a succeeding session. But instead, they recessed for a month and went home, leaving GMH to burn in its own need.”
Senators have suggested asking the federal government to allow federal American Rescue Plan funds to be used for hospital repairs, but the governor said that “by arguing over the use of these funds after their obligation has passed, we risk losing them altogether.”
She said with the veto, and the substitute budget bill she will offer, “our legislature must choose support GMH for all of us or secure tax giveaways for the favored few.”
The budget bill was approved by a vote of 11-4, and 10 votes are required for a veto override.
In a letter accompanying her veto, she said she was aware that if the votes held, the budget bill would become law.
“This fact does not allow me to abandon the needs of our larger community to benefit the wealthy few, or absolve me of my responsibility to make sure our agencies and people are provided for,” she wrote.
The Guam Chamber of Commerce, which supported the BPT rollback, issued a statement opposing the governor’s decision. The group noted that the 5% tax rate has been in effect since 2018.
“In all that time, not a single dollar was statutorily protected as a dedicated set-aside for Guam Memorial Hospital. To now claim the BPT must remain at 5% is not sound budgeting - it is an insult to the thousands of employers and working families who have shouldered the elevated tax year after year,” the group stated.
“After eight years of a higher BPT, our public outcomes are deteriorating: our schools are in shambles, our parks are dirty, and community pools remain closed or non-operational. Along Marine Corps Drive, rows of empty commercial buildings stand as a stark, daily reminder of how hard Guam’s private sector is fighting simply to survive.”
