Information on “new revenue” for FY 2013 expected to be high on Fono agenda

When the Fono convenes next week to start the 4th Regular Session of the 32rd Legislature, one of the issues expected to be tackled by lawmakers is to seek more information on the new revenue the government is expecting to fund the fiscal year 2013 budget.

The expected additional new revenue was revealed in the FY 2013 budget call letter from Budget Office director Malemo Tausaga, who asked ASG departments and agencies to revise their budget ceilings upwards as a result of the new revenue.

“While drawn out economic woes may weaken our local revenue collections pool; [an] additional new source of revenue is anticipated and projected to inject a much needed boost for FY 2013 proposed budget,” said Malemo.

Samoa News has since learned that some lawmakers have been looking into this matter and plan to raise it as soon as possible when the Fono convenes, by asking the Fono leadership or chairmen of budget committees to seek more information from the administration.

Malemo didn’t identify the source of the new revenue, but information received by Samoa News points to a letter sent last December by Senate President Gaoteote Tofau Palaie to Gov. Togiola Tulafono dealing with available ASG money as a funding source to address the financial shortfall faced by LBJ Medical Center.

The source of funding is the money not yet pledged but held in the escrow account for ASG from the national Tobacco Master Settlement Agreement. A government source believes the unpledged money should be around $6 million.

Gaoteote introduced early this year an appropriation bill to assist the hospital, to be funded with the unpledged interest in the MSA, which was a settlement reached between major tobacco companies and other states and territories. American Samoa’s share was used as a security for an $18.6 million loan ASG received from the federal government.

The loan, which was used to pay off previous debts and fund fiscal reforms, is overseen by the U.S. Department of Interior. ASG granted to DOI an assignment of its interests in certain payments to which it was entitled under the MSA, especially payments made pursuant to two provisions of the MSA, according to the bill.

However, ASG did not assign or pledge its interest in payments to which it is entitled under a third provision of the MSA. The said payments from the MSA escrow account were to commence on Apr. 15, 2008 and are to continue through Apr. 15, 2017, according to the bill.

The bill also states that said payments are not reflected in ASG’s projected revenues.

During a Senate hearing on the bill held earlier this year, Fono legal counsel Henry Kappel explained that after reviewing the FY 2012 budget, nothing was mentioned about money in the escrow account being included in projected revenues. However, he said that in ASG financial statements for FY 2010, this escrow account had a balance of $2.1 million.

Meanwhile, the Senate and House will convene Monday in their respective chambers with the FY 2013 budget among the top priorities for lawmakers to review, debate and approve, before the current fiscal year FY 2012 ends midnight of Sept. 30.

Other matters for the Fono to consider at this final session of the 32nd Legislature are two administration measures. One would create by law the American Samoa Environmental Protection Agency, which currently exists through two executive orders issued more than two decades ago; the other is the administration bill submitted last year to create a new Department of Information Technology.

Comment Here