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Too few private sector jobs to merit trimming workforce

Tax credit (30A) for all new U.S. companies would create more job opps
reporters@samoanews.com

If enough jobs were provided by the private sector, Gov. Togiola Tulafono says he would not hesitate to strengthen and revamp the the American Samoa Government workforce by cutting down on payroll expenditures through the elimination of hundreds of ASG jobs.

The governor made the comment on his weekend radio program as part of his reply to a caller who spoke about a number of issues, including job availability in the government workforce.

Although payroll expenditure for the government is high, ASG jobs are providing financial support for local families, he said, and noted he is not ashamed to say that if he wanted to strengthen, reorganize, and improve the ASG workforce some 2,000 jobs would be eliminated.

However, “if those 2,000 jobs are taken away where are these individuals going to go for employment?” he asked. The governor says there is no where else in the territory for these people to be employed because there are not enough companies in the private sector to re-employ this many people if they were cut from the ASG workforce.

He also said this is the reason he has continued to push the U.S. Congress for a new tax credit for American Samoa that would benefit all U.S. companies who want to do business here, and reminded everyone that the current tax credit (30A) benefits only the canneries.

He said a new tax credit that targets all types of business would be very useful in attracting other U.S. based companies to set up in American Samoa, providing more job opportunities. He said ASG cannot provide such huge tax credits, except for the federal government.

Togiola said he has written to Congressman Faleomavaega Eni and certain members of the U.S. Senate to help with federal legislation that would extend federal tax credits to all types of businesses, not just the canneries. He said the goal is to attract more companies which would mean more jobs.

Yesterday morning, Faleomavaega announced in a news release that the U.S. Senate Committee on Finance has approved an extension of the 30A credit, and it will soon go to the floor for a vote. In his press release, he explained that “…on Tuesday night of this week, our 30A provision was left out of the first proposal… because some Senators raised concerns that our 30A tax credit only benefitted a single business — StarKist — due to Chicken of the Sea’s departure from American Samoa in 2009, one day after our islands were hit by a tsunami.

“Several Senators felt it was bad tax policy to provide a tax credit for only one company and other Senators were not open to expanding the credit to include other industries or companies at a time when our country is in the middle of an economic downturn.

“After a series of internal discussions and written correspondence and upon learning that we had been left out of the first mark, Senator Bingaman graciously agreed to offer an amendment on American Samoa’s behalf.”

“We agreed that the best way forward was to offer an amendment that expanded the credit to apply to other manufacturers, including Tri-Marine, so that we could restore competitive balance between the two canneries, with the potential of also attracting new investors if a company could meet the eligibility criteria.  Senator Bingaman’s amendment was to be offered at this morning’s mark-up and, in anticipation of the mark-up, I reached out to Republican allies for support.

“Last night, with Senator Hatch agreeing, we made the manager’s mark and were included in the base text of the bill, thanks to strong behind-the-scenes support from key Republicans. Senator Wyden was also very helpful in supporting our cause. I am deeply appreciative for all those who were willing to support our 30A provision, given how important this provision is to stabilizing American Samoa’s economy until such time as ASG can put an action plan in place to diversify our local economy.

“Both Democrats and Republicans realize that this provision will protect thousands of jobs in the Territory, and I am thankful for the strong showing of support the people of American Samoa received today.

“The Joint Tax Commission (JTC) has estimated that the revenue cost of a two-year straight extension of the credit to be $38M for 10 years. We do not have a score for the inclusion of other manufacturers, like Tri-Marine, but we do believe the cost will be similar.”

In a June 15, 2012 letter to Senate Finance Committee Chairman Max Baucus and Ranking Committee Member Orrin Hatch, the governor requested the committee to consider American Samoa’s request in 2010 for an extension of its economic development credit for all qualified businesses in the Territory.

In 2010, the Committee approved a four-year extension of economic development credit for American Samoa; however, the extension did not apply to new businesses making new investments and new hires in the Territory, he said.

The governor recalled in his letter in December 2010 to the same committee that an extended credit to all new businesses “would create an incentive for any new business coming into American Samoa.”

BACKGROUND

In his press release, yesterday, Faleomavaega said, “Once more, I want to thank those who have stood with us, including Chairman Max Baucus and Ranking Member Orrin Hatch of the Senate Finance Committee who fought for our provision, Chairman Jeff Bingaman and Ranking Member Lisa Murkowski of the Senate Committee on Energy and Natural Resources for their unwavering support and commitment, Senator Ron Wyden, and those Republican Senators who were prepared to vote in favor of our amendment had it been necessary. I also thank Ranking Member Sander Levin from the House Committee on Ways and Means who weighed in on our behalf, and I look forward to working with Chairman Camp, too.” 

“Now that we have been successful in our efforts to include 30A in the Family and Business Tax Cut Certainty Act of 2012, the Senate will soon consider the entire Act. If passed, the bill will be considered by the House, but it is unclear whether or not the House will accept the Senate version or will present a version of its own which will set up the need to conference both bills at a later date. Whatever the case, I will continue to keep our people updated as the matter progresses,” Faleomavaega concluded



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