Gov seeks amendment to $3 Million bill for LBJ

Says during cash shortage, LBJ should not have made payroll priority

Gov. Togiola Tulafono will be asking the Fono to amend the $3 million loan for the LBJ Medical Center so that after the loan from the Workmen’s Compensation Account is paid off by the new 2% wage tax, all revenues collected thereafter will be earmarked specifically for medicine and special supplies for the hospital.

Togiola made the revelation on his weekend radio program responding to a caller who inquired about this new wage tax, which is already being deducted from paychecks of government workers beginning with last week’s payroll.

According to the $3 million loan bill, proceeds collected from this wage tax will first repay the loan to the Workmen’s Compensation Accountant and thereafter all funds go to fund LBJ operations. Togiola signed the bill in February.

On his radio program, the governor says this new 2% wage tax revenue source is the first of its kind to go directly to the hospital and this is different from the annual ASG required subsidies to LBJ.

According to Togiola, he has asked the Fono leadership for an amendment to this law, so that once the loan is paid off, this money will be earmarked specifically to purchase medication for the hospital.

He says this is one of the major issues that surfaced from the reports on the financial condition of the hospital — that LBJ has put a hold on the purchase of much needed medication and other specialized equipment for servicing patients due to the lack of funds.

The governor said the amendment to the bill is that all revenues collected after the loan has been paid off will not be used to fund payroll or other hospital expenses but will be specifically for medication, equipment needed by physicians and nurses, as well as specialized equipment needed by the LBJ Laboratory.

Togiola said he does not want this practice to occur again, in which the hospital first covers payroll when there is a cash shortage.

(He did not mention his own Treasurer’s remarks that the ASG payroll is the main priority of the government, with all else of secondary concern.)

The governor also reminded radio listeners that this new wage tax has no sunset clause and will continue.

It was not immediately clear if this proposed amendment will be presented next week Monday, when lawmakers reconvene for the special session after a two-week mid session recess.

The governor’s call for a special session included three main bills regarding LBJ: $10 million for the off island medical referral program; an $8 million loan from the ASG Employees Retirement Fund (which was rejected by the Senate last week) and the proposal to dissolve LBJ and return it to the Department of Health.


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