Welcome to the website of the Vice Speaker for the 32nd Guam Legislature, Senator Benjamin J.F. Cruz.

On this site you can view all of the Senator's introduced Bills and Public Laws, as well as Press Releases from his office; you can also use this site as a starting point to view relevant pages about the island of Guam.

Thank you for visiting.

Cruz’s FOIA to Track Paper Trail of $22M in Section 30 Revenues

Thursday, July 24th, 2014 at 10:21 am

VICE SPEAKER CALLS ON DRT TO SETTLE DISPUTE OVER FY13 GOV’T AUDIT

(July 23, 2014 – Hagåtña) In preparation for the year’s budget process, Vice Speaker Benjamin J.F. Cruz has called on the Department of Revenue and Taxation (DRT) to provide information regarding the $22 million in disputed Section 30 funds that has been applied to the total federal income collections for fiscal year 2013 but whose collection status has yet to be confirmed.

DRT director John P. Camacho and deputy director Marie M. Benito appeared before the Committee on Aviation, Ground Transportation, Regulatory Concerns, and Future Generations during an oversight hearing conducted this morning.

“This Freedom of Information Act (FOIA) request has been addressed to the Department of Revenue and Taxation (DRT),” Cruz writes in his letter to Camacho,“because I have been informed that at least $15,000,000 of the $22,869,385 in additional Section 30 revenue that was recognized, was permitted on the basis of communications, formal or otherwise, between DRT and the federal government.”

In a government-wide audit report for FY 2013, Deloitte & Touche LLP applied a total of $22,869,385 in additional “Section 30 Funds” to the FY 2013 Section 30 Federal Income Tax Collections total of $96,104,113 for FY2013.  This addition was made without receipt of these funds, $15 million of which remains uncollected as of July 14, 2014.

Cruz added that despite numerous official communications and media statements made by the late Speaker Ben C. Pangelinan, Congresswoman Madeleine Z. Bordallo, and Governor Eddie B. Calvo and his communications staff regarding these funds, there has been no official communication confirming the exact amount GovGuam stands to receive in additional Section 30 funds, the date of receipt of such funds, nor the authority of GovGuam to retain the additional Section 30 funds without a federal offset.

In the FOIA letter to Camacho, Cruz is requesting information regarding the $7,869,385 and $15,000,000 in additional Section 30 revenue that was recognized in the Department of Administration’s AS400 financial management system on June 23 and June 26 respectively, to include payment status, dates of notification and transfer, and confirmation of pending deposits from the federal government.

Additionally, Cruz is seeking all communications and documentation regarding these two amounts, and a determination whether GovGuam’s $22-million debt in unused funds that were paid in advance for the Making Work Pay Tax Credit will impact the additional Section 30 revenues due to Guam.

Referenced documents are attached.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Cruz Bill to Close Another Tobacco Tax Loophole

Thursday, July 24th, 2014 at 10:20 am

BILL 384 TO BAN CERTAIN TOBACCO DISCOUNT SCHEMES

(July 22, 2014 – Hagåtña) Five months after a public health win in February with the enactment of Public Law 32-132 to establish tax parity among tobacco products, Vice Speaker Benjamin J.F. Cruz has introduced legislation to prohibit the sale of tobacco products through discounted multi-pack marketing schemes and to ultimately close another tobacco tax loophole.

“This bill aims to end the tactic of giving away free or combo-packed merchandise to make tobacco products cheaper and harder to tax, and more accessible to the youth,” said Cruz, who introduced the tobacco pricing legislation last Friday. “While there’s still a great deal of money to be made in keeping people hooked on nicotine or in perpetuating that addiction among younger consumers, there will always be a few tobacco companies that are eager to take advantage of legal loopholes wherever they exist.”

Bill No. 384-32 (COR) prohibits the sale of tobacco products to retailers or consumers through any multi-pack discounts (e.g. “Buy two, get one free”).  It also prohibits the sale or distribution of tobacco products without charge or for less than the listed or non-discounted price.

Price discounting is one of the tobacco industry’s strategies to influence purchasing and use among potential customers who would otherwise be deterred by higher tobacco prices.  These strategies offset price increases caused by tax hikes and keep products affordable and attractive, especially to those in demographics that are most price-sensitive.

While many tactics are geared toward wholesalers and retailers, recent direct-to-consumer tobacco marketing in Guam has periodically included multi-pack discounts, 75-cents-off or dollar-off deals, and other price-related incentives.  Under Guam’s existing laws, some of these marketing tactics may even allow distributors to avoid tobacco taxes altogether.

A part of Cruz’s ongoing public health campaign to reduce tobacco use and ease the burden of related government-paid health care costs on the taxpayer, Bill 384 was drafted in consultation with the American Cancer Society Cancer Action Network in Honolulu and with the support of the Non-Communicable Diseases (NCD) Consortium comprised of representatives from various government agencies, not-for-profit organizations, and the private sector.

“Public health data shows that our community’s efforts to reduce tobacco use in Guam are working,” said Cruz, referring to the 30-percent drop in the rate of smoking among adults in Guam, from 31.2 percent in 2001 to 25.8 percent in 2012.  The enactment of P.L. 30-80 in 2010 increased the tax on cigarettes and other tobacco products and allocated new tax revenues to the Guam Cancer Trust Fund for the prevention and treatments of cancers and other diseases caused by smoking and tobacco use.

According to the Federal Trade Commission, the amount spent on cigarette advertising and promotion by the largest cigarette companies in the United States rose from $8.05 billion in 2010 to $8.37 billion in 2011, due mainly to an increase in spending on price discounts in order to reduce the price of cigarettes to consumers.  Spending on price discounts increased from $6.49 billion in 2010 to $7.00 billion in 2011.

The referenced documents can be found here.  For more information, call the Office of the Vice Speaker at 477-2520 or 687-7567.

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Cruz Introduces Minimum Wage Bill to Benefit 22,363 VS Refutes Another Minimum Wage Myth

Monday, April 14th, 2014 at 5:46 pm

(April 14, 2014 – Hagåtña) Vice Speaker Benjamin J.F. Cruz has introduced legislation to responsibly increase minimum wage from $7.25 to $10.10, that would benefit an estimated 22,363 workers and their families by 2017—with an estimated 7,840 workers seeing the first increase on New Year’s Day 2015, according to the Guam Department of Labor, Bureau of Labor Statistics.

Since Guam’s minimum wage is not indexed to the cost of living, the minimum wage must be increased legislatively from time to time to make up for the loss in its real value—or purchasing power—by inflation.  Since 1990, the island’s minimum wage has been federally increased eight times without the economic devastation typically predicted by opponents.

A recent point of contention is the false assertion that Cruz’s proposal will increase wages at a rate which is insufficient to compensate for a corresponding decrease in subsidies from the Supplemental Nutrition Assistance Program (SNAP), thus creating a disincentive to earn more.

Figures from the federal Food and Nutrition Service that administers SNAP, colloquially known as the food stamps program, however, say otherwise.  By design, SNAP not only acts as a safety net for the elderly, disabled or temporarily unemployed, but also supplements low-income wages.  As a result of the SNAP benefit calculation rules, SNAP households are financially better off if they are able to secure employment or increase their earnings (see Table 1).

No. of Income Earners

No. of Dependents

Max SNAP, $7.25 (FT)

Income + SNAP, $7.25

Max SNAP, $10.10 (FT)

Δ SNAP

Income + SNAP, $10.10

Δ Wages

Net Increase (éWages, êSNAP)

1

1

$447

$1,607

$355

($92)

$1,709

$254

$162

1

2

$668

$1,828

$576

($92)

$1,990

$254

$162

1

3

$875

$2,035

$783

($92)

$2,197

$254

$162

Table 1. Net increases for SNAP families (monthly expenses of $500 for rent and $200 for utilities) after full-time, minimum-wage earning heads of household receive a minimum wage increase to $10.10 an hour, based on FNS SNAP Eligibility Screening Tool.

According to national statistics provided by the Center on Budget and Policy Priorities (CBPP), among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP—and more than 80 percent work in the year prior to or the year after receiving SNAP.  The rates are even higher for families with children—more than 60 percent work while receiving SNAP, and almost 90 percent work in the prior or subsequent year.

“The clear majority of people on SNAP work to support themselves and their families; they just don’t earn enough to do it by themselves,” said Cruz, refuting unsubstantiated statements given by public health that were reported by media today.  “We need to ask ourselves the question: Just how much poverty should people be subjected to when working full time?  How poor should their children be?”

Introduced this morning following Cruz’s announcement at the Guam Women’s Chamber of Commerce’s forum last Thursday, the much-anticipated bill repeals and reenacts a section of the Minimum Wage and Hour Act of Guam’s Fair Labor Standards (22 Guam Code Ann. §3105), requiring employers to pay workers an hourly rate of no less than $8.20 by Jan. 1, 2015; $9.15 by Jan. 1, 2016; and $10.10 by Jan. 1, 2017.

Cruz’s “10-10” proposal will take a phased-in approach, raising the minimum wage 95 cents a year for three years until the hourly rate reaches $10.10 in 2017, a total wage increase of $2.85.

The Guam Bureau of Statistics and Plans report that costs for housing (24), food (32), medical care (15), electricity (42), and fuel (26) are all up by double-digit percentages since 2007, but local Department of Labor figures show that the average hourly rate in the private sector has only increased 14.5 percent since the third quarter of 2007 when the first of the last federal three-step wage increase was implemented seven years ago.

“As a judge, I learned that the greatest dangers to the truth are well meaning men who choose to find their conclusions first and their evidence second,” added Cruz.  “If you take an honest look at the facts, review the evidence, and analyze the Guam experience, you will find that an increase in the minimum wage does not kill jobs, cause massive inflation, or outpace public benefits; by giving minimum wage workers and their families a raise; we decrease dependence and increase dignity.”

Bill 316-32(LS) can be found on www.guamlegislature.com.  For more information, please call the Office of the Vice Speaker at 477-2520 or 687-7567.

ComparisonInTotalIncomeAndSnapBenifitsWithMinWageIncrease

Appendix4142014

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