Ilagan says Rev and Tax needs money to make money

by Ken Wetmore, KUAM News
Wednesday, May 26, 2004

How to slice the financial pie - that's the question that neither the administration nor the legislature seem eager to answer. Both the Legislature and the Administration say public safety, education, and public health must be the government's top financial priorities. With that said, one of the agencies that asked for the largest increases in their budget yesterday before Vice Speaker Frank Aguon, Jr. suspended the budget hearings cannot be classified as falling under public safety, education, or public health.

The Department of Revenue and Taxation is asking for a $1.5 million increase in its budget, and lawmakers at Wednesday's hearing seemed amenable to the idea.

Aguon has made it pretty clear that any department and agency looking for an increase in their budget better have a really compelling argument to support the increase, especially if they don't fall within public health, education, or safety. When Rev & Tax director Art Ilagan asked for his budget to be increased from his 2004 budget of $8.9 million to $10.5 million in 2005, he was prepared.

The Rev & Tax director told senators that it his agency that brings in the bulk of revenues to run the Government of Guam. He pointed out he is severely understaffed and said he believes there are businesses and individuals who are getting away with not paying their fair share simply because he doesn't have the staff he needs. "If you give me the staff that I need to flush out analyze our data, flush out taxpayers that are not complying with the law. Go out and knock on doors and say, 'Hey, you owe us money pay up', or we're going to look for your bank accounts they'll come in, they'll find ways to make those payments," he explained.

Ilagan promised lawmakers he would double, triple, and even quadruple what he termed as "a $1.5 million investment". Senators had a hard time arguing with Ilagan, especially since they increased his budget last year and he has produced. Aguon said of Ilagan's performance, "The first year he took office Rev & Tax collected $9 million, the second year $20 million in outstanding receivables, this year to date 33 million dollars outstanding receivables so the reality is that perhaps if we invest additional resources in to Rev and Tax perhaps they will be able to go out and aggressively collect the outstanding receivables to this government."

Republican Senator Joanne Brown said she is also open to looking at increasing Rev & Tax's funding. "I don't think there's any doubt that there's a need to put more revenue resources behind Rev & Tax, and as I mentioned its almost performance-based budgeting,"

she told KUAM News following this morning's meetings. "If we're going to invest this amount of money what are you going to deliver and the director has been very straightforward in terms of what he's been able to do in the past year and what he's looking to do in the upcoming year and I think overall that's a tremendous benefit to the community so it would be a win-win we would invest a little money to get a whole lot more back and that to me is a good tradeoff."

Senator Robert Klitzkie also heard Ilagan's testimony and seemed impressed, saying, "I think he's got a track record that demonstrates that he's pretty credible along those lines." When asked if he was favoring giving him this increase he's asking for, the freshman policymaker said cautiously, "I want to hear the entire budgetary process and cycle before I make any decisions on such matters but I'm certainly inclined in that direction.

Ilagan is hoping the rest of the Legislature will also be inclined to give him the increase. Besides wanting to increase his audit staff Ilagan said due to the land in Tiyan being given back to the original landowners, Rev & Tax is now faced with paying rent, and he also says he must set up a tax advocate office within the agency so that taxpayers who don't agree with their audits can go to the advocate for help with their case. Ilagan says failure to provide the advocate can cause courts to toss out contested tax assessments.

The bottom line, according to the Rev & Tax is this: if you want more money for the rest of the Government of Guam, you've got to fully fund the agency that brings in the cash.

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