Administration sees no deficit in FY05

Despite the current crises facing the Commonwealth Utilities Corp. and the garment industry, the Babauta administration expects to end the fiscal year without incurring a budget deficit.

“We don’t see that. In fact, there’s a projected surplus, if not for the CUC crisis, ” said press secretary Peter A. Callaghan.

He said that based on the data from the Department of Finance, collection will exceed $213 million this fiscal year.

The government is currently operating on a $213 million continuing resolution.

The administration has paid CUC $11.4 million, which is $6.4 million more than the appropriated amount for fiscal year 2005.

This “extra” payment and another $5.1 million “reserved” money for emergency fuel purchase have been reprogrammed from various programs.

The massive reprogramming of funds came after the governor declared a state of emergency on May 19 amid the lack of a stable fuel supply.

The declaration is ongoing due to the poor power generation in CUC’s power plants, the government said.

Callaghan said the decline in garment user fee “is not that low.”

The government used to collect an average of $2.5 million a month from garment user fee. The government now receives an average of $2 million a month

The Finance Department recently reported that revenue collection totaled $154.2 million as of June this year, which is 6 percent more than the same period last year.

Total taxes generated reached $127.9 million during the first nine months of fiscal year 2005, which is slightly higher than last year’s $123.3 million.

Total fees, services and other revenues generated $24.4 million, giving the government a total of $156.3 million in general funds.

Last year’s general funds during the same period totaled $148.2 million.

The government also credited $6.4 million in total transfers and “others”, bringing the total operating resources to $162.7 million as of June 30 this year.

Based on Finance records, the government realized the increased collections from the following areas:

* Business Gross Revenue Taxes, $44.4 million from $38.4 million;

* Personal/corporate income tax, $6 million from $5.6 million;

* Liquid fuel tax, $3.1 million from $2.6 million;

* Amusement machine licenses, $7.2 million from $5.9 million;

* Hospital charges, $12.3 million from $11.9 million;

* Other revenue, $3 million from $1 million in FY 2004.

At the same time, the government recorded decreased collections from the wage and salary tax (1.2 percent), gaming jackpot tax (18.9 percent), garment user fee (8.5 percent or $19.8 million from $21.7 million in FY 2004), tax penalties and interest (30 percent).

The government had passed last year a tax amnesty law, which resulted in $2 million collection from delinquent taxpayers.

Garment user fee collection was slightly up in June at $2.1 million.

In May and April, the collection only reached $1.8 million for each month, which was believed to be the lowest in several years.

The government projects a 20 percent decline in garment user fee this fiscal year, or at least $22 million or $24 million a year.