Governor vetoes court judgment bills, calls funding source "a fiction"


Gov. Togiola Tulafono has vetoed two court judgment bills, calling the funding source used by the Fono  “a fiction” and urged lawmakers to approve the initial funding sources, which were hikes in business license fees and excise taxes as well as a new corporate franchise tax.

The first court judgment appropriates $32,500 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. The other calls for $321,757 to settle a judgment against ASG for breach of contract by failing to pay for construction services provided by Pacific International Engineering, Ltd. (PIE).

In both bills, the source of funding is unbudgeted FY 2012 revenue from the Tobacco Master Settlement Agreement, the governor wrote in his Sept. 19 letter to the Fono leadership, announcing his veto of the two bills.

“The notion that unbudgeted FY 2012 revenues from the Tobacco Settlement agreement exist is a fiction and thus both bills lack a viable funding source,” the governor wrote. “Without an actual funding source, the government cannot pay these judgments.”

“Signing these bills in to law would only commit the government financially where there are no fiscal resources. On this basis alone, these bills must be vetoed,” he said.

It was the Senate who amended the funding source for the two judgments, based on information from ASG witnesses during budget hearings that American Samoa is getting some $6.8 million in the so call unpledged interest from the tobacco settlement. The Senate believes that this money is new and unbudgeted revenue in FY 2012. The House went ahead with supporting the amended funding source.

Prior to the governor’s veto letter arriving at the Fono, the Fono joint budget committee had included these two judgments in the final budget of FY 2013. The judgments are listed under Special Programs budget category but with different amounts: PIE is given $329,500 and the accident that injured a student is allocated $42,500. The administration had initially submitted $329,000 plus for PIE but the Senate amended the bill and the House endorsed it, to deduct the $25,000 that the court had ordered the government last month to pay for funeral service of PIE owner, Warren Fisher.

In his veto letter to the Fono, the governor pointed out the administration had submitted early last year, bills to increase business fees, excise taxes and a new corporate tax. He said the potential revenue from these bills would have been realized by now and these two court judgments could have been paid if the tax and fee hike bills had been implemented expeditiously. (Initial funding source of the two judgments were the hike in fees, taxes and the new corporate tax.)

“Now the government is no closer to satisfying these judgments than it was nearly two years ago,” he said.

“While we contemplate whether and how to satisfy these judgments pending against the government, we must not overlook the need for further legislative action to adequately safeguard public funds from similar issued civil judgments,” he said.

He also called on the Fono to consider and pass the administration bill, which seeks to amend provisions to the Government Tort Liability Act. Among the changes sought by the governor, last year, is to set the ceiling of government liability in a civil suit at $100,000.

“Unless the legal protections proposed in that bill (Tort act) are enacted, public funds used to pay for programs and essential public services will continue to be at risk,” the governor said. “Finding viable sources of funding to pay civil judgments against the government is not an easy task. Neither is developing a fair and equitable way to balance harm caused by the government with the services the public requires.”

“But it is our duty to take on these tasks and to resolve these issues,” he said and noted that the revenue measures and the amendments to the Government Tort Liability Act will provide resolution to the two judgments and provide protection for government resources going forward.


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