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2014 budget ups ASG subsidies for LBJ, ASCC

The LBJ Medical Center and the American Samoa Community College are both getting an increase in government subsidies under the fiscal year 2014 budget proposal, which provides the hospital with a boost of $2 million, according to the FY 2014 budget summary.


Specific details of each entities’ budgets — listed under the Enterprise Fund — have been submitted via computer disc to the Fono. Subsidies for LBJ and ASCC are listed under the annual budget’s Special Programs budget category.




LBJ has been faced with financial constraints over the years and this year was no different with the hospital encountering a reduction of both local and federal funding. Gov. Lolo Matalasi Moliga had promised since taking office in January this year that efforts would be made to ensure financial stability of the hospital.


In the FY 2014 budget summary, ASG has allocated $6 million in subsidy for LBJ with the governor explaining that the quality of healthcare service remains one of the most critical priorities for the government and this recognition gives rise to the allocation of an additional $2 million in ASG subsidy to the hospital.


“This additional subsidy qualifies the hospital for an additional $2 million from Medicaid funds yielding $4 million of new revenues to finance healthcare services,” he said in the budget summary. He also says the additional funding “compliments the work” of the LBJ board and management “in their attempt to reduce the administrative cost component of healthcare services.”


Securing sufficient local matching funds for Medicaid money has been a constant problem for LBJ over the years and in FY 2013, they faced the same problem. The previous administration had proposed, and LBJ budgeted, $5 million for the ASG subsidy.


However, the Fono last year cut one million, arguing that the hospital was getting $1.25 million from the 2% payroll tax.  LBJ, however, did not receive a penny of that money for the entire 2013 fiscal year. The Lolo administration does not expect the hospital to receive money from the payroll tax until after the year 2013.


(The 2% payroll tax, according to statute, is to be used first to pay off the $3 million loan the government took from the ASG Workmen’s Compensation Fund. The loan proceeds were given to LBJ. It is only after this loan is paid in full that the proceeds will go to the hospital: 50% for hospital operations and 50% to fund the off-island medical referral program.)




The ASG subsidy for the community college is $3 million and Lolo told lawmakers that education reflects a priority issue for the government and the recent accreditation of ASCC with a four-year Bachelor of Education degree program “increases the need for financial support.”


He said the increase of $650,000 in subsidy for FY 2014 “speaks to the need for new capacity building programs to address the needs of the 85% of high school graduates entering ASCC unprepared to do college level" work.


ASG's financial commitment to ASCC with its B.Ed program, under the Lolo administration, was cited in the Mar. 18, 2013 report by the Western Association for Schools and College’s Accrediting Commission (WASC) Special Visit Team, conducting the final review of the B.Ed accreditation for ASCC, which was granted on July 10 - via letter - as Initial Accreditation for the B.Ed program.


Provisions of the report state that the ASCC president had informed the team that he met with the new territorial governor in January 2013 and “was able to confirm full, continued support” for ASCC’s Teacher Education Department (TED).


“ASCC has entered into new contracts to provide in-service training for K-12 teachers on the island,” the report states. “They have also completed a Memorandum of Understanding (M.O.U.) that will pay them $500,000 per year to help prepare currently non-credentialed K-12 teachers to eventually obtain either an Associate of Science (A.S.) or B.Ed. degree, and full scholarships for high school graduates that enter ASCC as education majors.”


“The team was pleased to learn from the President that he is confident in a sustainable funding stream for the B.Ed. into the foreseeable future,” it says.