Day 1 budget hearings: More questions than answers

Lawmakers asking for more up-to-date reports

Lawmakers were unable to ask questions regarding revenue sources for funding the American Samoa Government’s fiscal year 2014 budget of $456.30 million without up-to-date revenue collection information on corporate and excise taxes for the current fiscal year.
This was the conclusion made yesterday, the first day of the joint budget hearings where ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili and Budget and Planning office director Catherine Aigamaua-Saelua were the first to testify.
The decision to postpone questions until the updated material is available was made by the Senate Budget and Appropriations Committee chairman Sen. Laolagi F.S. Vaeao after Pili said there is a newly updated report, which shows that corporate tax collection has surpassed the $6 million estimate for FY 2013 to over $10 million.
ASG is forecasting a collection of $17.7 million in fiscal year 2014 for corporate taxes and $25.05 million in excise taxes.
Laolagi asked the Treasurer to provide the Fono with details on up-to-date corporate tax collection as well as updated information on excise tax collection. Laolagi said the Fono has not seen these reports, which are important at this time, as the joint budget committees are reviewing their revenue forecast for FY 2014.
At the start of the hearing, Pili provided an overall view of funding sources for FY 2014, which includes local and federal revenues. Pili advised lawmakers that there are more local revenues estimated to fund FY 2014 than in previous fiscal years.
Laolagi asked lawmakers to hold off on asking questions pertaining to revenue projections until the Fono receives all financial reports, which have been requested, and another hearing to specifically discuss details of FY 2013 revenue collections will be called soon.
However, Rep. Larry Sanitoa was able to get in some of his concerns, saying it’s difficult for the Fono to review the FY 2014 funding sources without any of the latest financial reports to go by. For example, he noted that the expenditure and revenue updates for the end of the third quarter of FY 2013 - up to June 30 - were not included in the Treasury Department’s 3rd quarter performance report.
He said this has been the usual practice with performance reports, which provide a “snap shot” of where government finances and expenditures stand.
Pili said the revenue vs. expenditures report was intentionally left out due to concerns that it didn’t provide a “clear” picture of ASG operations, as there were some issues that needed to be clarified.
He said that report would reach others— including the media— that would publish it with the misinformation that needs corrected. (Samoa News should point out that one of the subjects of misinformation in the 2nd quarter performance report dealt with the Fono’s FY 2013 approved budget, which was mistakenly less than the approved budget.)
Pili said the government wants to make sure the report is accurate and he is hopeful the next quarter, and in the new fiscal year, all these issues will be resolved in the ASG computer system and accurate reports will be issued.
However, he did point out that the Legislative Finance Office of the Fono can obtain all updated financial reports from the Treasury Department.
Still, said Sanitoa, it's very hard for the Fono to make judgments on financial matters for the government without updated financial reports. For example, he said, the corporate tax forecast for FY 2014 is “substantial” at $17.7 million compared to FY 2013 at only $6 million.  He asked if the FY 2014 forecast is accurate.
Pili responded that as of July the estimated collection stands at about $13.6 million with a projected $3 million to $4 million more to be collected in August and September. He also said the projection for FY 2014 has factored in other issues - such as the American Samoa Power Authority no longer being a fuel supplier. A new fuel supplier will bring in between $3-$5 million in corporate taxes, he noted. Another factor is that more corporations are being audited.
“The $17.7 million in corporate tax is a very conservative number,” he said.
House Vice Speaker Talia Fa’afetai Iaulualo asked if there is a deficit for FY 2013, and Pili responded that ASG is hopeful for a “balanced budget” but “if there is a deficit, it’s very small.”
The point was raised by lawmakers that in the past ASG projections and estimates have shown that by the end of the fiscal year, the government faced an overrun.
More later in the week on this hearing.


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