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Faipule concerned over possible $10MIL shortfall

“The recent financial crisis in the Territory of Puerto Rico as reported should be a prime case study for our government to take interest in the lessons to be learned,” says Tualauta Faipule Larry Sanitoa, who continues to request financial statements from the American Samoa Government over concerns that ASG is at a shortfall of $10 million for the first six months of FY 2015.

 

The crisis in Puerto Rico the lawmaker is referencing came from a report by Investors Business Daily, in which Puerto Rico says it can't pay its $73 billion debt. IBD says that Puerto Rico is in deep, owing actually much more than that amount. It reported that — as co-authored by former International Monetary Fund No. 2 Anne Krueger — the island's finances are a shambles.

 

“The devastating analysis noted that some 150 agencies ran up deficits that couldn't even be accurately counted, so the true indebtedness might be even higher — as much as $100 billion by some estimates. The government has funneled public money to state-owned enterprises that are supposed to be financially independent. Worse, the report said, many workers no longer even look for jobs, since welfare benefits pay more than actual work.”

 

It states, “In short, the government has been horrendously mismanaged.”

 

Sanitoa in a statement said that although our economy is smaller than Puerto Rico, the underlying issues are similar.

 

“At our current state, ASG cannot afford to spend and borrow money beyond its means to generate sufficient revenue to repay its debts.

 

“The latest report from our Legislative Finance Office revealed ASG is at a shortfall of $10 million for the first six months of FY 2015.

 

“Understanding the shortfall was partly due to the shipping crisis earlier in the year, the question that remains is whether ASG can generate enough revenues to sustain operations for the last two quarters,” Sanitoa wrote.

 

He said recently approved taxes and fee increases will temporarily help. “However, it is potentially counter-productive to any foreseeable economic growth given these increases will eventually be passed on to the consumer.”

 

In his letter to the Legislative Financial officer, Talalemotu Mauga, Sanitoa is again requesting financial reports.

 

“As stated many times before, these financial reports are crucial, and relevant references that will help lawmakers make informative and thorough decisions for the upcoming budget hearings. Since there were revenue collection issues earlier in the year due to shipping delays and recent approved new taxes by the Fono, it is imperative that lawmakers get the latest and current actual revenues versus expenditures for ASG.”

 

He pointed out to Talalemotu that in the next few weeks, the Fono will again engage in review and discussion of the Fiscal Year 2016 budget.

 

“Given your analysis report on revenue projections and the possible shortfall earlier this year, I respectfully and urgently seek your assistance once again in requesting the following reports to be made available:

 

2014 ASG final Financial Statement and/or Audit Report (News report has it that a completed 2014 financial statement is now ready);

 

General Fund Expenditure and Revenue Reports from Budget, 10/01/2014 thru 6/30/2015; and,

 

General Fund Revenue and Expenditure Reports from Treasury 10/1/2014 to 6/30/2015.”