Latest 1st Qtr Treasury Revenue Collections Report shows shortfall of over $4Mil
A detailed revenue collections report from Treasury — covering the first quarter of fiscal year 2014 — shows a shortfall of over $4 million in revenue collections causing concern among lawmakers, who now want to hear from ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili, when he returns from his off-island travel.
The latest revenue collections report and the latest “preliminary and unaudited” on revenues versus expenditures report were both received by the Fono last week, following a request two weeks ago from Rep. Larry Sanitoa, who sought the data because it was not included in the Treasury Department’s first quarter performance report.
The reports provided the Fono with the status of ASG finances for the 1st quarter of FY 2014.
Some senators also sought the same reports last month and early this week, during a Senate meeting to review revenue collections and payouts of the 2% wage tax. Senators wanted to know the “actual financial picture” of ASG before the end of the second quarter, which will be Mar. 31, 2014.
According to the revenues versus expenditures report, the American Samoa government was able to contain spending in the first quarter of fiscal year 2014 — due mainly to the 10% hold on all department and agency budgets as part of the cost containment measures imposed by Gov. Lolo Matalasi Moliga last year.
Senate Budget and Appropriations Committee chairman Sen. Laolagi F.S. Vaeao said an official request will be submitted to the Treasury Department for a current financial status report before calling a committee hearing.
A big concern among lawmakers — first raised at last year’s FY 2013 budget hearings — is whether the ASG revenue forecast for FY 2014 was going to be met.
Before the budget hearings last year, the Legislative Financial Office (LFO) provided an analysis to the Fono saying that local revenue projections were “excessive” given the collection trend over the past ten years.
According to the revenue vs expenditures report, which does not include the semi autonomous agencies of government, none of the government departments and agencies recorded an over run for their first quarter allocation. Even the Fono, with a history of overspending, managed to control spending with only $1.70 million expended of its total FY 2014 budget of $7.06 million.
At the end of the first quarter, total expenditures stand at $21.44 million, which includes department and agency expenses at $16.7 5 million and $4.69 million for “Special Programs”.
An analysis by the LFO of the Treasury report found that ASG contained spending at 20% in the first quarter and this is attributed to the 10% cost containment imposed by the Budget and Planning Office, as mandated last year by the governor.
Samoa News should point out that several projects to be funded under the “Special Program” have yet to have their funds expended during the first quarter. Among those projects are: $1 million each for the Governor’s Economic Development Private Sector Initiative, High School Gym Improvement and the Development Bank of American Samoa business loan program.
The Treasury report didn’t provide any major difference in numbers compared to the “preliminary” revenue collection report submitted last month to the Fono by the Budget Office.
According to the Treasury report, the total local revenue budget for FY 2014 (not including Interior Department grant-in-aid) is $95.03 million with $23.75 million projected to be collected in the first quarter. However, only $14.32 million was collected, causing a shortfall of just over $4.44 million.
(Samoa News should point out that if the trend from the first quarter continues, ASG is looking at a shortfall of close to $18 million at the end of FY 2014, which closes Sept. 30. 2014)
According to the report’s numbers, two major contributors to the shortfall are Individual Income Taxes — with a shortfall of $1.43 million — and Excise Taxes, with a $1.70 million shortfall.
(Treasury budgeted $25.11 million in individual taxes and $25.05 million for Excise Tax for FY 2014.)
It should be noted that Corporate Taxes did well in the first quarter. Projected collection for the first quarter was $4.42 million but the report says total revenue collected for the first three months of the fiscal year totaled $6.02 million.
Samoa News reported last month that some House members had been informed by government officials that the 2% wage tax — which is earmarked for the LBJ Medical Center, after paying off the $3 million loan from the Workmen’s Compensation Account — may have been included in the Corporate Tax collection.
However, a break down of revenue collection for the first quarter shows that the 2% wage tax is included in the Individual Income Tax category. For the first quarter, the wage tax collection totaled $65,883.
Lawmakers have also noted that there is a major decline in revenue collection for the soda tax, which was budgeted at $2.5 million for FY 2014, with $625,000 projected to be collected in the first quarter. However, ASG only raked in $435,023 for the soda tax — around a 31% drop. There was no explanation of the drop, i.e. overall import drop for all goods or just for sodas.
THE NEW COMMENTS PROCESS
To make comments, you will need to register. You can register under your real name or use a 'screen' name. This way, people will be able to follow comments and make comments back and forth to each other. If you choose to use a 'screen name' no one will know your true identity. In either case, no email addresses will be available to anyone. It is an automated process. If you have questions, email: firstname.lastname@example.org
You currently are not logged in, please LOGIN to post comments.