Budget hearings underway
During the first day of the Fono joint budget committee review of the new fiscal year 2018 Basic Budget yesterday, ASG Treasurer Uelinitone Tonumaipea emphasized to lawmakers that revenue sources to fund the new fiscal year are estimates or projections, and this is especially important for local revenues.
Tonumaipea also revealed that the ASG Debt Service account, which includes monies to repay the bonds, now has it own separate bank account.
Tonumaipea, along with Office of Budget and Planning director, Catherine D. Saelua testified on the overall FY 2018 budget, and were questioned on the budgets of their respective agencies.
Of the total FY 2018 budget of $395.26 million, more than $96.8 million is from local revenues, which Tonumaipea said are estimates based on the current collection trend.
Sen. Magalei Logovi’i, chairman of the Senate Budget and Appropriations Committee, inquired about Debt Service in FY 2018, and Tonumaipea explained that this budget item is separate from the regular budget, and now included in the Enterprise Fund budget category.
He said Debt Service includes repayment of the bonds, and has its own bank account. This revelation was pleasing to lawmakers, who are keen on making sure that the government has sufficient funds for bond repayments.
According to the basic budget document, ASG is allocating $8 million for Debit Service and Tonumaipea told lawmakers that the amount is an estimate for FY 2018. “We’re conservative” with the estimate, he said.
Funding sources for the repayment of bonds, issued in 2015 by the American Samoa Economic Development Authority, is through a certain percentage of revenues collected from current excise taxes.
With no other specific questions on the overall basic budget, lawmakers then reviewed Treasury Department’s proposed $4.5 million budget with 156 employees, compared to the FY 2017 budget of $5 million with 173 workers.
Tonumaipea said the reduction of workforce is attributed to employees who have resigned, retired, or relocated off island.
Treasury’s basic budget covers only personnel costs, with no allocation for the rest of its expenditures such as materials & supplies, contractual services, and travel. Tonumaipea told the committee that he is hopeful the Fono will pass the revenue measures submitted by the governor which will fund the FY 2018 Supplemental Budget, that will cover these Treasury expenses.
Some lawmakers voiced their concerns about what will happen if the Fono does not approve the revenue measures. Tonumaipea reiterated that the administration is hopeful the bills will pass.
In the proposed supplemental budget, not yet introduced in the Fono, the Treasury Department is seeking $900,000 with $855,500 going towards personnel costs for 31 employees - 19 workers for the Customs Division and 12 for the Tax Office.
Rep. Vailoata Eteuati Amituana’i wondered about the Customs Border Agents cited in the budget, and Tonumaipea explained that these employees are assigned to the newly established Border Security Scanner Unit - dealing directly with x-ray scanners, which was one of the projects funded with bonds proceeds.
Tonumaipea said the salaries of these employees - five border agents and a compliance officer - are currently paid by the off-island contractor that was awarded the scanner project as part of their contract.
However, come the new fiscal year, these employees will have to be paid by ASG through local funds, and their salaries are included in the FY 2018 supplemental budget, said Tonumaipea.
Amituana’i voiced his concern about what will happen to these employees, and the service they provide, if the supplemental budget does not go through because the revenue measures failed to garner Fono endorsement.
As to who is handling maintenance for the scanners, Tonumaipea said the contractor is required under contract to provide maintenance for three years, but Treasury is trying to recruit and train local workers to take over this responsibility once the contract expires.
(No information was revealed as to when the contract with the off-island firm for maintenance expires, but Samoa News understands there's about 2 years left.)
The Treasury Department, as well as all other Executive branch offices, all show funding allocations for increment payments to employees. Saelua explained that since the current administration took office in 2013, the governor had placed a freeze on all increments and this remains in place today - as part of cost containment measures.
She said that executive entities were informed to still include increments in their budgets and maybe later, when the Fono approves the proposed revenue measures, there will be funds to cover the increments.
It was a very brief hearing when it came to the Fono’s review of the Budget Office’s proposed $650,000 budget for FY 2018
Their FY 2017 budget was $720,000
Saelua said her office complied with the governor’s directive to reduce the budget by 10% of the approved FY 2017 budget - in local revenues.
And there is funding allocation in the basic budget to cover expenditures such as materials and supplies, travel and equipment.
According to the budget document, the agency has 12 employees.
It was announced at yesterday’s budget hearings that the Governor’s Office budget, which was set for review yesterday afternoon, is moved to this morning. Furthermore, all budget hearings will start at the scheduled time of 9:30a.m, and will continue throughout the day until hearings for all ASG entities scheduled for that day are completed, to avoid afternoon hearings.