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Community suggests alternatives to wage cut
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Posted on Apr 16 2006
Discussion on the administration’s wage cut proposal has generated several recommendations from the community on how government can increase revenues and retire its over $100-million deficit.
The suggestions offered during Wednesday night’s public hearing on the wage reduction bills pending in the Legislature included tax increase and the tax rebate suspension.
This early, however, the Fitial administration has discounted the possibility of increasing taxes. Press secretary Charles P. Reyes Jr. said the governor planned to make good on his election promise not to raise taxes because such a move was opposite to his economic goals for the Commonwealth.
Community members, particularly government employees who oppose the planned wage reduction, maintained on Wednesday that a tax increase would be a more equitable solution to the government’s financial crisis.
“It looks like you’re punishing those working in government,” NMI Humanities Council executive director Paz Younis said of the wage cut proposal.
One of her suggestions was for the government to increase the minimum wage and the income tax rate. “Share the burden with the private sector. But make the tax hikes gradual. Better yet, tax the ones who earn the most,” she added.
Younis also maintained that tax rebates should be scrapped, saying that such incentives should be given only in the time of revenue surplus.
Public School System finance director Richard Waldo also suggested a moderate tax increase and a raise in government employee share in the retirement contribution.
Mary Ann Calvo, a businesswoman, proposed that the government raise the fixed user fees paid by the apparel industry. Garment factories do not pay the business gross revenue tax of up to 5 percent on revenues, but instead pays a “user fee” of 3.5 percent of exports.
Sen. Felix Mendiola, chairman of the Senate Fiscal Affairs Committee, stressed at the public hearing that the bills seeking to cut government wages by 10 percent across the board were not final and merely instruments to open dialogue between the government and the public.
