Governor Lou Leon Guerrero urges keeping business tax at 4.5% as budget safeguards services
February 11, 2026 | General Government Operations and Appropriations , Legislative, Guam, International
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Governor Lou Leon Guerrero told the 30th Guam Legislature she submitted a budget that keeps the Business Privilege Tax (BPT) at 4.5% and prioritizes essential services, arguing a rollback to 4% would remove more than $40,000,000 in revenue at a time the administration says the island must protect core programs.
The governor opened her address by noting a string of fiscal improvements: unemployment near a record low of 3.2%, annual debt service reduced from $92,000,000 to $65,000,000, and what she described as turning an $83,000,000 deficit into a cumulative $297,000,000 surplus with a rainy‑day fund of nearly $60,000,000 in cash. "A budget is how the government protects people when outside support is uncertain," she said.
She framed the BPT choice as a values decision. The administration recommended holding the BPT at 4.5% to preserve flexibility to respond to shocks and to safeguard education, public safety and health services. "Reducing the BPT to 4% would have resulted in an additional loss of more than $40,000,000 in revenue to the people of Guam," she said. The governor argued most small businesses already pay less than 4% and that the primary beneficiaries of a larger rollback would be large, often off‑island corporations.
The address also linked those budget choices to wider priorities: investments in village gyms and playgrounds, road and streetlight repairs, teacher and public‑employee pay raises, and restored public‑safety capacity. The governor said those decisions enabled the government to end federal receivership at a correctional dump and at the Guam Behavioral Health and Wellness Center.
The governor urged the Legislature to weigh longer‑term stability against short‑term tax relief and noted that prior administrations relied on temporary excess revenues to fund permanent commitments. She said the budget she submitted reflects what she described as legal and moral responsibility ‘‘to submit a budget I believe is in the best interest of the people of Guam.’’
The session adjourned following a motion by Majority Leader Senator Lujan.
The next step is for the Legislature to consider the governor’s budget submission and any statutory changes to the BPT rate.
The governor opened her address by noting a string of fiscal improvements: unemployment near a record low of 3.2%, annual debt service reduced from $92,000,000 to $65,000,000, and what she described as turning an $83,000,000 deficit into a cumulative $297,000,000 surplus with a rainy‑day fund of nearly $60,000,000 in cash. "A budget is how the government protects people when outside support is uncertain," she said.
She framed the BPT choice as a values decision. The administration recommended holding the BPT at 4.5% to preserve flexibility to respond to shocks and to safeguard education, public safety and health services. "Reducing the BPT to 4% would have resulted in an additional loss of more than $40,000,000 in revenue to the people of Guam," she said. The governor argued most small businesses already pay less than 4% and that the primary beneficiaries of a larger rollback would be large, often off‑island corporations.
The address also linked those budget choices to wider priorities: investments in village gyms and playgrounds, road and streetlight repairs, teacher and public‑employee pay raises, and restored public‑safety capacity. The governor said those decisions enabled the government to end federal receivership at a correctional dump and at the Guam Behavioral Health and Wellness Center.
The governor urged the Legislature to weigh longer‑term stability against short‑term tax relief and noted that prior administrations relied on temporary excess revenues to fund permanent commitments. She said the budget she submitted reflects what she described as legal and moral responsibility ‘‘to submit a budget I believe is in the best interest of the people of Guam.’’
The session adjourned following a motion by Majority Leader Senator Lujan.
The next step is for the Legislature to consider the governor’s budget submission and any statutory changes to the BPT rate.
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