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AG says public hearings come next prior to any hike in port fees

Attorney General Talauega Eleasalo V. Ale [SN file photo]
Rep. Ve'evalu: It's not fair to propose all these taxes, when there's no increase in wages

The director of Port Administration does not make the final decision on future hikes for  port fees and charges but instead, such matters go through public hearings, in accordance with provision of the Administrative Procedures Act.

This is according to testimony by Attorney General Talauega Eleasalo Ale, during last Thursday's House committee hearing.

Several fees and charges at the Port will be increased under the proposed bill, which includes provisions stating that fees and charges “may be modified every five years.” Additionally, "the Port director shall review these fees every five years and, if necessary, initiate modification of fees and charges under this chapter in accordance with provision of the Administrative Procedures Act."

When the bill was discussed last Thursday, some lawmakers voiced their concerns with giving only one person, the Port director, the authority to review such fees and charges every five years, and initiate any modification.

Many in the private sector, including G.H.C Reid & Company, and Neil’s ACE Home Center, have raised the same concern.

Talauega explained that while the Port director can initiate review of such fees and charges, that doesn’t mean the director is the sole person who makes the final decision.

Talauega, who is also chairman of the ASG Revenue Task Force,  said the full explanation of the proposed provisions in the bill is that such changes go through the Administrative Procedures Act, which outlines the process of implementing regulations.

For example, he said, if the port director wants to make changes, it goes through public hearings.

When asked if the task force had consulted with the business community before the submission of the new port fees and charges, Port Administration director Taimalelagi Dr. Claire Poumele explained that in 2015, Port Administration had a meeting with “port users”, which included local businesses that use the port.

At the time, port users were briefed on proposed changes to fees and charges that Port Administration was looking at; however, no proposed legislation was submitted at the time to the Fono, she said, adding that another meeting was held last year with port users about the same issues.

She said Port Administration shared with port users the three-levels of percentages (10%, 50% and 70%) of the proposed fees, as well as estimated revenues to be collected for each percentage level.

Therefore, she said, Port did meet with the private sector - referring to the port users - and their input on fees and charges was gathered at the time.

Taimalelagi shared with lawmakers that under local statute, there are port fees that the governor has the authority to change, and there are port fees that require Fono review and approval.

She said the Port Administration director alone does not make a decision on fees and charges, it's public input through port users, through discussions, and a reached agreement.

Taimalelagi agreed with lawmakers that it’s not appropriate, not does it sound right, to give the director the authority to set fees and charges. She reminded them that all monies collected on fees and charges go to the general fund.

Some committee members had inquired about how much revenue ASG collects from port fees and charges.

ASG Treasurer Uelinitone Tonumaipea insists that it's “always around $2.5 - $2.6 million.”

However, in the ASG Task Force presentation to Fono leaders and some lawmakers this past July, and again to the Chamber of Commerce  in August, they said current collection on fees and charges is $4.55 million and the proposed hike is estimated to collect $7.11 million.

Data included in Gov. Lolo Matalasi Moliga's letter to the Fono regarding the FY 2018 budget shows that estimates approved under the FY 2017 budget was $3.8 million, while $3.5 million is proposed in FY 2018.

It was clear from comments made by some lawmakers during the House hearing, that there are serious concerns regarding the public - the consumers - carrying the burden of the proposed fees and charges, which will be passed on by the shipper to the vendor, and ultimately, to the customer.

Rep. Veevalu Meauta L. Mageo said the proposed fees, as well as the current excise taxes, will be “passed on to the consumer,” and the hike in fees, as well as the proposed sales tax, will further increase the cost of living, while wage levels remains the same.

He believes the ones who'll be impacted the most by all these revenue measures are low income earners, and questioned if the task force had looked at the cost of living, and compared it to current wages, when deliberating on the proposed hikes in taxes, fees, and charges.

Ve’evalu, along with other lawmakers, agree that the proposed revenue measures would help the government in going forward, but there are so many revenue bills being put through all at the same time for approval by the Fono and thus poses the question about what happens to the people, the consumer, who are the ones that'll end up paying for it.

The Pago Pago lawmaker believes it's not fair to propose all these taxes while there is no increase in wages - referring to ASG workers - whom he says are still facing a freeze on their annual increments.

Commerce director Keniseli Lafaele, a member of the task force, said they conducted an analysis, and to lessen the burden on the public, they moved to repeal the 2% wage tax - returning this money back to wage earns.

Ve’evalu quickly responded, “but the task force is also proposing a 7% sales tax”, which is much higher than the wage tax. (Provisions of the sales tax would repeal the wage tax)

Rep. Timusa Tini Lam Yuen recalled the government's proposal more than a year ago to hike business license fees from $25 to $150 but the latest Commerce Department quarterly report shows a drop in the issuance of business licenses since the fees were hiked.

Rep. Toeaina Faufano Autele offered a suggestion: "Why not gradually increase port fees and charges over a 5-year period instead of imposing all of them at one time?"

Talauega acknowledged the concerns raised by lawmakers regarding the impact the fees and taxes will have on the public, and said it was taken into serious consideration by the task force, and it wasn't easy for them.

He said the measures are now before the Fono, and lawmakers have the authority to make changes on what they deem is appropriate.