Revenue sources for $5MIL supplemental appropriation bill revealed in House hearing
ASG Treasurer Dr. Falema’o ‘Phil’ M. Pili fielded several questions from lawmakers during the House Budget and Appropriations Committee hearing that began at 12noon yesterday on the ASG $5 million FY 2013 supplemental appropriation.
Pili was accompanied by ASG Budget Office director Catherine Aigamaua-Saelua.
In his address to the Fono in January, Gov. Lolo M. Moliga said that his administration — based on only the short time it has been in office — was projecting a $5.1 million deficit at the end of the current fiscal year.
Responding to questions from House Vice Speaker Talia Fa’afetai Iaulualo during yesterday's hearing, Pili said that in the second quarter, which ends Mar. 31, “it looks like the deficit will decline from $5.1 million” to around $2 million. Talia quickly asked ASG for an updated report on the status of the changes in the deficit after the close of the second quarter.
Pili made clear at the outset of the hearing that the four different funding sources are new revenue sources, and therefore in accordance with the law, are subject to Fono appropriation. One of the revenue sources is $1.5 million projected in military cover-over tax.
He says this amount of money goes back years ago but was not collected from the federal government for military personnel who claim American Samoa as their home of record. (Also included in this income are those individuals who work for the federal government and wanted to pay their taxes to American Samoa.)
He said the $1.5 million should be received by ASG in the next 35 to 45 days.
Rep. Larry Sanitoa pointed out that only $1 million is budgeted in FY 2013 to be collected and in past budget years, the amount projected to be received was very small. He also noted that in the first quarter of FY 2013, the government collected only $195,000.
Pili responded that this is “windfall” money — the $1.5 million — but it could be more if the government continues a review of past years and collects what is owed to ASG.
Another funding source is the $1.7 million from an underestimate in the government’s FY 2013 original budget submission of recoverable indirect costs related to federal grants.
Sanitoa pointed out that there is already a 5% federal budget cut due to the sequestration and wanted to know how this could be underestimated revenue for the indirect costs related to federal grants.
Pili said there are three rates to determine the indirect costs — for example, personnel has a different rate. However, he said he does not believe that the sequestration will have any affect on the indirect costs as presented in the supplemental.
Another funding source is $500,000 from a Consent Decree between the National Associations of Attorneys General and Toyota Motor Corporation. Pili said he will need to check on whether this is a partial payment or full payment for American Samoa.
The fourth funding source is the Tobacco Master Settlement of $1.3 million — reported in a separate story in today’s edition.
PROGRAMS TO BE FUNDED
Pili provided a brief explanation for each program to be funded with the supplemental and much of the information regarding the outstanding ASG legal obligations were cited by Lolo in his January address to the Fono. (See Monday’s edition for specific details of other programs to be funded.)
Lawmakers did raise questions on several programs. For example, Rep. Faimealelei Anthony Allen said that his concern with the $150,000 to replenish the Small Village Fund is that there has been no accountability of this account in the past.
He said that if the House approves this supplemental and other problems later surface, Pili will be called back to the House to provide answers. He said this is a new administration so, he is putting his trust in them.
Rep. Florence Saulo wanted to know who is responsible for the distribution of the $100,000 allocated to the Office of Samoa Affairs, which is given to all three districts for their beautification projects.
Pili responded that this is a project overseen by the Secretary of Samoa Affairs, Satele Galu Satele Jr, who wanted to centralize this program and that Satele will be responsible for the accountability of the funds.
He said Samoa Affairs needs “seed” money to purchase tools and equipment to move this project forward.
Rep. Saulo also inquired as to why the $250,000 for new restroom facilities at Fagaitua High School, and Pili responded that this was the result of a visit by the governor to the high school, where he found the bathrooms in very bad condition.
He said the governor’s reaction to this problem — after the visit — was to fix it and this was for health reasons. He also revealed that there was an administration meeting this week and departments and agencies have been assigned to make sure that the needs of the schools are addressed.
Pili said his department, Treasury, is assigned Leone High School and Fa’asao Marist High School. He also says that there is about $1.4 million in Capital Improvement Project (CIP) set-aside funds that can be used to make necessary repairs for all public schools.
Regarding money allocated for immigration expenses, Rep. Fetu Fetui Jr. wanted to know as to the type of immigration investigation that will be involved with this money. (The administration is seeking $100,000 to pay the investigative costs arising out of audits of the Immigration Bond Fund and other Immigration Office expenses.)
Pili said the Attorney General’s Office is looking at investigation issues such as overstayers, problem with policies and to find the corruption within the Immigration Office as these are some of the issues the federal government wants ASG to fix.
Rep. Sanitoa said he believes the Territorial Audit Office has the capacity to audit the Immigration Office. He also pointed out that in past budgets, approved by the Fono, there is always appropriation to upgrade the immigration computer system and he was surprised to see the administration requesting another $250,000 for the immigration computer system.
Pili said this is a new system because the previous one is not functioning.
Regarding questions about the $550,000 as partial payment of a multi million dollar High Court judgement against ASG for the old Laufou Shopping Center fire, Pili stressed that this is only a partial payment for the judgement which he believes has reached $7.8 million. He said ASG lawyers are negotiating with all parties involved regarding this judgement, that the governor wants to start paying down.
It's unclear at this point if the committee will hold another hearing on the supplemental, while the Senate will convene a hearing tomorrow to review this measure.