Gov. Lou Leon Guerrero has vetoed the Fiscal Year 2027 budget bill passed by the 38th Guam Legislature, proposing a revised bill she described as a "balanced budget."
The governor said she vetoed Substitute Bill 266-38 because it reduced government revenues "without a responsible plan to protect essential services."
Sen. Shawn Gumataotao expressed disappointment in a statement issued Aug. 3 following the veto.
"I am disappointed with the decision by the Governor of Guam to veto the FY2027 budget our branch presented. She noted at the start of our process that the proposal was 'unreasonable and unacceptable.' If she waited for budget talks to be completed, she would have been witness to something more unreasonable and unacceptable," Gumataotao said.
He said at least four of the governor's fellow party members "urged the ballooning of budget appropriations with no restraint and administrative amendments they fought for vigorously to only vote to not pass. The two others struggled to stay in line — amenable to common sense compromise. Discernment was replaced with a last grasp of political leverage."
The governor responded with a statement offering a revised bill that maintains the 4% Business Privilege Tax rate while "restoring funding for healthcare, public safety, child care and other critical government services through identified replacement revenues."
"The issue before us is not whether the Business Privilege Tax should be 4 percent or 4.5 percent," Leon Guerrero said. "Our revised budget keeps the BPT at 4 percent. The issue is whether we will responsibly fund the services the people of Guam depend upon. Our revised budget proves we can do both."
The governor explained that her proposal incorporates "updated revenue projections" pointing to approximately $18 million in additional recurring corporate income tax collections, which she said restores essential appropriations while maintaining a balanced budget.
The revised budget also secures $7.63 million in child care funding for FY2027 from unobligated FY2026 general fund revenues.
"This funding is separate from legislation currently pending before the Legislature that addresses the current FY2026 CCDF shortfall. Even if that measure is enacted, additional funding is still necessary to sustain the program through FY2027," the governor's office said.
Without the governor's proposal, the child care subsidy program would be forced to serve fewer children, reducing access for working families and creating uncertainty for both parents and providers, the governor's office said.
The governor's office stressed that signing Substitute Bill 266-38 would result in "significant reductions" to Medicaid local match funds, senior citizen services, the Guam Behavioral Health and Wellness Center, services for individuals with disabilities, police, fire and corrections recruitment and youth programs for at-risk youth, among others.
The governor said she will convene the Legislature into special session to expedite consideration of the revised bill.
"Our responsibility is not simply to pass a budget," Leon Guerrero said. "It is to adopt one that protects public safety, healthcare, child care, and the services our families depend upon while preserving Guam's long-term fiscal stability."