Mendiola: Not much appetite for tax hike among lawmakers
Sen. Dennis James C. Mendiola (R-Rota) believes that not too many representatives or senators are interested in increasing taxes at this time.
“So that’s the challenge here. I just wanted to point that out,” said Mendiola during the Senate Fiscal Affairs Committee meeting with Finance Secretary Tracy B. Norita and Office of Management and Budget special assistant Virginia Villagomez yesterday.
That effectively plants huge question mark on Gov. Arnold I. Palacios’ proposed budget for fiscal year 2024, since it includes a proposal to increase the Business Gross Revenue Tax beginning in the second quarter of fiscal year 2024 in order to raise an additional revenue of $9.1 million.
The proposal may also be scuttled via a technicality. In response to Sen. Paul A. Manglona’s (Ind-Rota) question, Senate legal counsel Antonette Villagomez said that any revenue generating bill has to be separate from the budget bill.
Norita said they’re estimating to raise around $1 million to $3 million revenue for fiscal year 2024 on a proposed 3% construction tax. Villagomez said the House of Representatives would have to introduce a separate bill to establish a construction tax as it cannot be added into the budget.
When asked if lawmakers can choose to suspend any earmarks that will have the least detrimental effect and allow them to pass a balanced budget, Norita said she can’t say which one because it’s like asking “which is more important in order to walk well—the left leg or right leg?”
“And so again that’s why we proposed just for those critical programs to be restored,” Norita said, referring to earmarks.
The secretary said they realized that on an annual basis, even the $116 million budget level of the current fiscal year is not enough to sustain a whole year’s worth of personnel and other programs.
She said it was this that drove them to look into how the government can increase revenue and that is primarily through taxes.
“Although no one wants to increases taxes at this point, I believe we need to and we just have to be mindful of the business community’s input,” Norita said, while adding that, “of course nobody wants the tax.”
Norita said that, when looking at how to raise revenues through taxes, it spreads the burden among the entire community.
She said if they try to handle it on the expenditure side, the burden will be on just a few number of people, which most likely will be just the government employees within the Executive Branch, or whatever other programs will be cut on the expenditure side.
“But at this point, we took all of those into consideration in preparing the budget and we believe that this was the best approach,” Norita said.
The committee hearing was presided by Sen. Donald M. Manglona (Ind-Rota).
Dennis Mendiola
