Gov says misunderstanding is what led to budget cuts
Restoring funds for two ASG offices with no funding in the new fiscal year, changing the Government Tort Liability Act to set a ceiling in lawsuits against the government, and a special session to be called later this month were some of the issues raised by Gov. Togiola Tulafono during his meeting yesterday with lawmakers at the Senate chamber.
Another issue is the governor’s proposal to elect members of the Senate instead of the current process of selecting them by traditional leaders in their respective counties. (See separate story in this issue).
The governor first spoke about the fiscal year 2013 budget, which has since been signed into law, saying that the administration may have erred in its explanation of certain issues pertaining to funds, prompting the cuts made by the Fono.
He said the most serious issues faced by the government from these cuts is that the Information Technology Department and the American Samoa Economic Stimulus and Recovery Office (ASESRO) have no budget for FY 2013.
Cuts made by the Fono that included these two offices totaled $6.8 million, which was restored under a supplemental appropriation for FY 2013, with the funding source the $6.8 million American Samoa was to receive under the tobacco settlement.
Togiola said perhaps a more thorough explanation is required first on the tobacco settlement and gave a detailed explanation of the settlement agreement between U.S. tobacco companies and states and territories — including American Samoa.
In exchange for American Samoa’s share of the tobacco settlement, ASG — during the term of the late Gov. Tauese P. F. Sunia — negotiated and received an $18.6 million loan from the U.S. government to pay outstanding debts at the time, and all proceeds from the settlement go to repaying the loan, which is expected to be completed in the next five years or so, he said.
He said all tobacco proceeds for American Samoa go to the Interior Department for loan repayment, but any additional funds received are negotiated with DOI and these funds then come to ASG’s coffer.
He said the $6.8 million is new money from the tobacco settlement and remains with DOI, but when these funds are to be released to the government is uncertain. He also pointed out that two bills [two court judgements] approved by the Fono with funding source as the unbudgeted FY 2012 revenue from the Tobacco Master Settlement Agreement had been vetoed because of the language of the funding source.
He said there is no such funding as “unbudgeted FY 2012” revenue from the tobacco settlement and this issue needs to be cleared up, because the money is not here yet, it is still with DOI.
So the $6.8 million is part of the local funding source for the FY 2013 budget, but the tobacco settlement money as a funding source for a supplemental appropriation has its problems as well, he said.
As a supplemental budget, programs and projects for the government will be on hold for up to six months while waiting for the actual funds to be received, he said, and including this money in the FY 2013 budget ensures continued operations while awaiting for the actual money to be received.
He suggested a “supplemental appropriation to amend the FY 2013 budget act” and requested that this language be used for a proposed supplemental to make it easy to be enacted and for it to take effect immediately.
As for the two court judgements, the governor said he is hopeful these two matters are cleared prior to the end of his administration.
TORT LIABILITY ACT
Togiola also urged the Fono to seriously consider approving an amendment to the Government Tort Liability Act (GTLA), which caps the amount which can be claimed against the government at $100,000.
Togiola has stated since 2010 — when the first GTLA amendment proposal was sent to the Fono — under current law, a suit against ASG for tortious acts are unlimited in amount and plaintiffs suing ASG may be entitled to amounts that far exceed the working budgets for several departments within the government.
Yesterday the governor said that unless there is a ceiling cap on lawsuits, the government could be in serious financial trouble in the future with millions of dollars in lawsuits, and in the end, it's the public that will have to pay for them, when there is no money to pay for these types of suits.
He also pointed out that the government is responsible for lawsuits pertaining to ASG as well as the LBJ Medical Center, adding that three current court judgements against ASG are close to $10 million.
The governor revealed that following a meeting with Fono leadership earlier in the day, he is looking at Oct. 22 to call a special session. He revealed that he plans to submit during the special session the re-nomination of the president of the Development Bank of American Samoa.
The governor’s nomination of Leilua Stevenson as DBAS president was rejected last Friday by the Senate when the nominee failed to secure a majority vote for confirmation.
Sen. Galeai Tu’ufuli was the first to respond to the governor’s address, saying that he wished cabinet directors would have provided the same explanation that the governor did. He said the governor’s explanation was very clear, concise and easy to understand.
For example, he said the Budget Office and the Attorney General gave conflicting testimonies on the $6.8 million tobacco settlement, prompting the Fono to take a different approach to this money.
Senate President Gaoteote Tofau Palaie agreed with Galeai saying that the Fono based its decisions on ASG reports and testimonies by directors. He said one of the testimonies regarding the $6.8 million stated that there was no money.
Gaoteote thanked the governor for providing a thorough explanation as well as the issues that he wanted to the Fono to address. He also said that despite any differences between the two branches of government, things are resolved in the end because the goal is for a better American Samoa.
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