Guernsey’s top political committee has said it will review infrastructure projects after its proposed income tax rise was defeated.
Policy and Resources (P&R) wanted to increase income tax by two pence in the pound for two years from 2025, which was rejected.
President Lyndon Trott said he made clear the estimated £34m that was hoped to be raised by the increase was “essential” to address the “immediate financial challenge”.
Trott had previously warned projects such as the hospital extension and new social housing could be cut.
He said the funding would have allowed continued investment in the island’s infrastructure.
“This is why we called this a ‘budget for infrastructure’, as the proposal to temporarily increase income tax would have enabled us to continue investing in capital projects the States agreed were essential,” he said.
“But we cannot continue spending money we don’t have.”
Trott confirmed P&R would make recommendations to deputies “in due course”, adding the committee must ensure the island was “fiscally responsible”.
The BBC understands P&R will bring an emergency budget in the early part of 2025.