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Joint budget committee proposing cuts of $6 MIL plus

LBJ subsidy cut by $1MIL
fili@samoanews.com

The Senate and House are scheduled to vote today in third and final reading for the American Samoa Government’s budget for fiscal year 2013, which has been reduced by more than $6 million.

Both chambers voted to endorse yesterday at second reading their own versions of the amended budget after the Fono’s joint budget committee met earlier in the day to iron out final language to the original budget of $497.29 million.

From a meeting early this week, the joint budget committee agreed to cut $6.8 million in local revenue, because there is no assurance that this money will be available at the start of the new fiscal year, after conflicting testimony from government witnesses.

The task was then given to the chairmen of the Senate and House budget and appropriations committee to go through the locally funded agencies and programs to cut the $6.8 million that can then be resubmitted as a separate supplemental appropriation at the appropriate time.

The chairmen presented their amendments to the joint committee yesterday morning followed by a debate and review of the amendments that lasted about two hours. In the end lawmakers agreed to cuts that add up to $6.8 million. The cuts are as follows:

•            DOE $394,000; •            Scholarship Fund $500,000;

•            Governor’s Office $500,000; •            ASG stimulus office $459,500;

•            Department of Information Technology $296,500; •            Legislature $500,000;

•            ASG vs Siaumau case funding $150,000; •            Marisco settlement federal case $1 million;

•            Laufou settlement case $1 million; •            ASPA- outstanding debt $1 million (which is to help pay down ASG’s debts to ASPA);

•            DPS $50,000; •            DPW $500,000; and

•            DOE facility renovations $450,000.

 

$1MIL CUT FROM ASG SUBSIDY TO LBJ

Another major change to the budget is that the Fono cut $1 million from the ASG’s $5 million subsidy to the LBJ Medical Center, reallocating the $1 million to other services.

Earlier in the week, the joint committee was informed by House Budget and Appropriations Committee chairman Vailiuama Steve Leasiolagi that $1 million should be cut from the ASG subsidy because LBJ should be getting additional money through the new 2% wage tax in the new fiscal year.

According to the wage law, revenues collected under this wage tax is to first pay off the $3 million loan for the hospital from the ASG Workmen’s Compensation Account. Thereafter all revenues goes to LBJ operations.

Vailiuama explained that ASG officials had testified before that they forecast collecting between $3 to $4 million a year under the wage tax and based on this forecast, the loan is expected to be paid in full by the end of December this year - which is also the end of the first quarter of FY 20113.

This means there is additional revenues going to the hospital in FY 2013 through this tax after the loan is paid by the end of this year,  he said.

LBJ is only forecasting to get $1.25 million from the wage tax in FY 2013.

WHO BENEFITS FROM $1MIL LBJ SUSIDY CUT

Two departments got extra money — Department of Port Administration with $210,000 and Election Office with $100,000 to help fund the 2012 general election, which was only allocated $200,000, but Chief Election Officer Soliai T. Fuimaono told lawmakers this month that an additional $240,000 is needed.

Also benefiting from the $1 million cut from the LBJ subsidy are several services listed in the budget under the Special Program category:

•             $140,000 for the Small Village/Water Fund, which has already been allocated $100,000 in FY 2013. This program is currently administered by the Office of Samoan Affairs.

•             $42,500 to settle a High Court judgment handed down in 2009 over a 2001 accident where a student was injured by a government vehicle around the Pago Pago Elementary School area.

•             $329,500 to settle a High Court judgment against ASG for breach of contract by failing to pay for construction services provided by Pacific International Engineering, Ltd. (PIE).

•             $10,000 to construct a new water tank for the A.P. Lutali Elementary School on Aunu’u.

•             $50,000 to cover medication costs for the clinics in Manu’a.

•             $50,000 to cover personnel costs at the Territorial Administration on Aging, which is the local government’s contribution for senior citizens working at the TAOA, whose budget is fully funded by federal grants. This allocation is separate from the TAOA’s FY 2013 budget.

•             $68,000 for personnel expenditures at the Department of Agriculture and this allocation is separate from the department’s budget of FY 2013 under ASG departments.

ASPA BUDGET CHANGE

Another change made by the Fono is that the American Samoa Power Authority’s FY 2013 is approved for four months only. Specific details on the breakdown were not available at press time, but should be available this morning.

This was the same move made by the Fono for ASPA’s FY 2012, where the authority argued that it’s the ASPA board that has the final decision on their budget and the utility operated FY 2012 with a budget of $118.47 million. ASPA’s budget for FY 2013 is $115.45 million.



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