1st Qtr ASG collections trend forecasts shortfall
A preliminary revenue collection report covering the first quarter of fiscal year 2014 shows the government has collected around $23.14 million, with taxes bringing in the highest revenue. However, based on the trend of collection in the first three-months of the fiscal year, the government is forecasting a shortfall of $18 million at the end of the fiscal year.
The preliminary report, for the period of Oct. 1 - Dec. 31, 2013, was requested by Rep. Larry Sanitoa, along with an expenditures report covering the first quarter, so that lawmakers have a better idea of ASG finances before any new money bills are submitted by the administration.
Only the revenue collection report was received last week by the House, prompting concerns from Rep. Taotasi Archie Soliai, who called for a hearing to find out more from the Treasurer Dr. Falema’o ‘Phil’ M. Pili and the Budget and Planning Office director Katherine Saelua.
Taotasi called this an important issue, saying the the House needs to look into the $18 million shortfall and the reasons behind it. He sought a House Budget and Appropriations Committee hearing on this matter.
House Speaker Savali Talavou Ale reminded lawmakers this is only a “preliminary report”— and for the first quarter only — while there are three more quarters left in the fiscal year. Savali recommended to wait until a later time to look into revenue collections.
Committee chairman Timusa Tini Lam Yuen had scheduled a hearing for this week Thursday, but it has since been cancelled because the Treasurer left last Friday night with the governor and others for scheduled meetings in Washington D.C.
However, what some House members are concerned with is whether or not ASG will be able meet its forecast revenue collection for the entire year; while another concern— and the reason for lawmakers wanting to hear from the Treasurer — are the preliminary expenditures for the first quarter, following reports of new contract hires in certain department and agencies, including the Governor’s Office.
PRELIMINARY REVENUE NUMBERS
The total revenue collection forecast for ASG in FY 2014 is $108.17 million, and this includes $13.76 million in annual ASG basic operation funding from the U.S. Interior Department, according to the preliminary report from the Budget Office, which shows that based on current collection trends for the first quarter, only $90.12 million will be collected at the end of FY 2014, resulting in an $18.04 million shortfall.
ASG’s biggest revenue comes from taxes — which are projected to collect $71.24 million in FY 2014 — but the preliminary report shows that based on current collection trends in the first quarter, ASG is projected to collect only $63.48 million by the end of FY 2014, causing a shortfall of $7.75 million for taxes.
Of total projected tax revenues in FY 2014: $17.70 million comes from corporate tax; $24.49 million in individual income tax; $25.05 million for excise tax; $2.50 million from the soda tax; and $1.50 million in military cover-over tax.
At the end of first quarter, total tax collection stands at $15.87 million, which includes $6.02 million in corporate tax; individual income tax $5.14 million; $4.10 million for excise tax; $435,023 soda tax and $159,537 for military cover-over tax.
While corporate tax collection appears to be doing well in the first quarter, Samoa News has learned from some House members that collection includes the 2% wage tax, which is earmarked to first pay the $3 million loan for the LBJ Medical Center from the Workmen’s Compensation Account, and after the loan is paid everything thereafter is to go to the hospital.
(In the preliminary report, Samoa News notes there is no column specified for the 2% tax revenue collection.)
Information that has reached the Fono states that many companies pay their corporate taxes towards the end of the calendar year, and this may be a contributing factor to the increase in corporate tax collection.
Samoa News should point out that at least four revenue sources didn’t record any collections in the first quarter. For example, “Indirect Cost”— with a total of $5.6 million— is budgeted for FY 2014. This budget item is money which ASG receives for administrative costs from federal grantors.
Samoa News further notes the government is saying the Workmen’s Comp loan was paid off from proceeds collected from 2012 into 2013 (Jan- Sept), which totaled $6.52 million. (See story Feb. 01, 2014 for details)