American Samoa Government’s fiscal year 2016 budget submission is just over $417 million, a 2% decrease from the current fiscal year, according to Gov. Lolo Matalasi Moliga’s 22 page FY 2016 budget summary sent to the Fono yesterday.

However, Fono leaders have requested that the actual budget breakdown be submitted in budget books instead of in electronic format (as CDs.)

Lolo informed lawmakers that the FY 2016 final budget — which begins Oct. 1, 2015 — totals $417.85 million, reflects a decrease of 2% (or just over $6.6 million) from the FY 2015 total budget of $424.48 million.

The FY 2016 budget is funded with $104.41 million in local revenues; $106.66 million in federal grants; $196.72 million under Enterprise Fund; and $10.04 million from Capital Improvement Projects.

The only increase in the budget proposal is under Federal Grants at $4.65 million or a 5% hike in FY 2016 from the current fiscal year.

Distribution of local revenues shows $69.09 million for the Executive Branch; $6.91 million to the Legislature; $2.88 million for the Judicial Branch; and $25.52 million for Special Programs, which are administered by the Governor’s Office, according to the budget summary.

REVENUE FORECAST

Based on the determined Economic Outlook, the governor said the Revenue Forecast Task Force projected local government revenues at $104.41 million, which is $1.82 million — or 2% lower — than FY 2015. He said the slight decrease is mostly attributed to the weak corporate tax collection anticipated in FY 2016.

Of the total FY 2016 revenue forecast, $66.50 million comes from taxes, which is ASG’s highest revenue source. ASG is estimating to collect $14 million in corporate taxes; $24.5 million in individual taxes; $24 million in general excise taxes; $2.5 million in the soda tax; and $1.5 million under the military cover over tax.

ASG had forecasted to collect $68.17 million in FY 2015 with $17.7 million in corporate tax; $22.4 million for individual taxes; $23 million for general excise taxes; $2.5 million for the soda tax; and $2.5 million for the cover over tax.

During last year’s FY 2015 budget hearings, several lawmakers questioned the high revenue projections on all these taxes. Some of them argued that ASG had over-projected revenue collections in corporate taxes, individual taxes and cover over tax.

TAX REVENUES

The governor says that the new revenue measures approved on cigarette excise tax, which recently went into effect, will bring in new revenue to boost excise tax collection. “The Treasury is cautiously optimistic given that this is a new tax and needs good enforcement efforts from the excise tax revenue collection team,” he said.

He also said that the “lower conservative” estimate approved through consensus by the Revenue Committee is to close the gap between over projections in FY 2015 versus actual cash flow and “we have to be mindful of any unanticipated events caused by outside market forces impacting our economy in a negative way, such as the most recent longshoremen contract dispute that caused backlogs and shipment delays of imported goods to our port.”

According to the governor, up to 9% increase in individual income taxes is being forecast due to the increase in employment opportunities anticipated with the Tri Marine International’s tuna cannery along with the influx of returning college graduates which have been employed by both public and private sector.

“Overall, the Treasury Department has also made it an integral part of its operating mantra to evenly, fairly, and aggressively enforce all tax laws... to ensure that all tax payers file their taxes,” he said.

“To increase its operation efficiency, the Customs Office is also focusing on updating its standard operating procedures to mitigate any current deficient collection practices being uncovered as well as elevating moral standards and conduct in the workplace,” Lolo said.

Additionally, business-strengthening initiatives implemented by the government, is expected to increase business importation of capital goods that are subject to excise taxes, and embolden confidence in sustaining a solid base of consistent excise tax revenue streams.

Samoa News will report on more issues outlined in the governor’s budget summary letter tomorrow.