In an 11-4 override of the governor’s veto, the Guam legislature Monday approved a fiscal 2026 budget bill that rolls back the Business Privilege Tax from 5% to 4.5% this year and drops it to 4% on Oct. 1, 2026.
While the governor’s office said the rollback would cost the government $40 million in fiscal 2026 and $80 million in fiscal 2027, senators who supported the measure said the bill would create jobs and provide financial relief for businesses and families.
Two Democrats, Sens. Tina Muna Barnes and Joe S. San Agustin, joined the nine-member Republican majority in voting for the override.
About an hour before the Legislature convened to consider the measure, the governor’s office released a statement warning that a senior analyst at Moody’s Investment Service said the rollback “would not be a credit positive” for Guam.
“Moody’s has made it clear that cutting government revenues jeopardizes Guam’s creditworthiness,” Gov. Lou Leon Guerrero said in the statement. “An override of my veto risks triggering higher borrowing costs for every new school, every hospital upgrade, and every infrastructure project our people need. It will saddle taxpayers with higher costs for years to come.”
Speaker Frank Blas Jr. praised the vote, saying the budget bill puts more money “directly into the hands of Guam’s families and empowering them to invest in their future.”
Sen. Chris Duenas, who chairs the Committee on Finance and Government Operations, said the vote “fulfills a promise made by the Republican majority over seven years ago.”
The BPT increase was initiated by Gov. Eddie Calvo in 2018 to offset revenue lost as a result of tax cuts during the first Trump administration. At the time, it was billed as a temporary increase.
Duenas said the government of Guam has demonstrated “robust revenue performance, consistently collecting more than projected.”
“We respect Moody’s insights, which highlight Guam’s financial strength,” said Duenas. “Our budget reflects that strength while ensuring stability and protecting essential services.”
The Guam Chamber of Commerce, which took a strong stance in favor of the rollback during budget hearings, issued a statement saying that for seven years, "Guam’s businesses have carried an elevated tax burden that was intended to be temporary. Today’s action restores credibility to that commitment and affirms that Guam values its private sector as the engine of jobs, investment and growth."
Following the vote, Leon Guerrero issued a statement saying the budget represents “$120 million taken away from the resources we use to pay for healthcare, education, and public safety in just two years.”
She said senators “chose their contributors over their constituents. And while government services will likely suffer, business groups themselves have admitted these tax cuts will not result in lower prices for consumers.”
