Senators want a detailed breakdown of $$ collected and earmarked for bond repayment
Pago Pago, AMERICAN SAMOA — The Fono Joint Budget Committee has requested the ASG Treasury Department for a breakdown of the tax revenues collected and earmarked to repay the bonds, as directed by law, after lawmakers learned that such revenues are not reported under the General Fund revenue collection for the new fiscal year 2019 budget.
This was revealed yesterday, Day One of the two-week FY 2019 budget revenue hearings, where ASG’s first witnesses were Treasurer Uelinitone Tonumaipea and Office of Program Planning and Budget director Catherine D. Saelua, who at the outset of the hearing gave a summary of the government's proposed $439.58 million budget for the new fiscal year.
Of the total proposed budget, $98.68 million is funded by local revenues, with $6.1 million collected from Charges for Services, compared to $6.6 million approved for FY 2018. Fees and charges collected at the port are included in Charges for Services.
In his cover letter to the Fono, Gov. Lolo Matalasi Moliga explained that this revenue stream is forecast to be lower compared to FY 2018. He said potential port activities will remain steady, given the restraints in fishery regulations, restricting the frequenting of inbound/ outbound vessels within territorial waters and beyond.
“Activities for cargo vessels are expected to be steadily increasing,” he noted.
During the budget hearing, House Speaker Savali Talavou Ale pointed out that the Fono passed — and the governor signed into law this year — legislation hiking port fees and charges; but the budget proposal shows a decrease in Charges for Service in FY 2019 compared to FY 2018.
Additionally, the government is only estimating $64.55 in the collection of taxes for the new fiscal year, with only $12 million to be collected under Corporate Taxes, while the Fono approved — and the governor signed into law — the new 1% minimum tax for businesses to pay.
Another lawmaker noted that the miscellaneous excise tax hike from 5% to 8% went into effect April this year, but the projected general excise tax for FY 2019 is only $21.55 million, a slight increase from the approved $19.5 million in FY 2018.
Tonumaipe’a explained that the numbers for FY 2019 are forecast or projections.
Senate President Gaoteote Tofau Palaie said it's important that when taxes are increased along with port fees, it should be reflected in the proposed projected revenues in the budget.
With the public paying all these hike in taxes and fees, other committee members, say the community should also be aware that such increases are reflected in the government's budget.
Joint Budget Committee co-chair Sen. Magalei Logovi’i, who is chairman of the Senate Budget and Appropriations Committee, asked about revenues collected and earmarked to repay the bonds, if they are included in the budget proposal.
Tonumaipea replied that revenues to repay the bond are not included in the General Fund account, as they are separated into its own account, in accordance with the law, and has its own report.
Savali reminded Tonumaipe’a that — also in accordance with the law — all revenues collected are subject to Fono approval through the budget process; and therefore, all new revenues collected, including those for repayment of the bond, require legislative approval.
Tonumaipe'a explained that revenues collected for bond repayment are reported under the Enterprise Fund for FY 2019 for the ASG Debt Service Fund for $8 million. But if the Fono requires a breakdown of the Debt Service and bond repayment money, he can provide a report.
Sen. Tuaolo Manaia Fruean echoed Savali’s statement, that all revenues collected are subject to Fono appropriation, and this includes revenues for the bond repayments, which should be listed as revenues collected in the ASG revenue forecast.
“What happens if there is no money to repay the bond? You will come back here (the Fono),” Tuaolo said.
Magalei requested a detailed report of the revenues collected and allocated to the Debt Service Fund to which Tonumaipe’a said he will comply with the Fono’s request.
Magalei raised with Saelua the issue of paying increments to ASG’s workforce, saying taxes have increased and the cost of living has gone up, so ASG workers need the increments.
Saelua responded that while increments are included in every budget submission, paying them out depends on ASG’s financial situation.
Magalei raised the same issue during the budget review for the Governor’s Office yesterday, telling the governor’s chief of staff, Fiu J. Saelua, to relay to the governor, the issue regarding the payment of increments to ASG workers.
Tuaolo asked who sets the salaries of employees at the Governor’s Office, to which Fiu responded that it's the Governor and Lieutenant Governor. Fiu added that the majority of the workforce are contract workers because the governor wants these workers to leave their posts, when the current administration leaves office, to make way for the new administration.
Budget hearings continue throughout this week.