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Senate stays course: Rejects amended $10M LBJ bill

The Senate in a majority veto yesterday rejected in second reading the amended House version of an administration bill seeking $10 million to fund the LBJ Medical Center off island medical referral program, with opposition senators saying that the funding source of hikes in excise taxes and business license fees will burden both the private sector as well as members of the community.

Four senators voted “yes” to approve the House version; they are Sens. Paogofie Fiaigoa, Alo Dr. Paul Stevenson, Lualemaga Faoa and Fuamatu J.V. Fuamatu.

Nine senators voted against the measure: Sens. Asuega Fa’amamata, Mauga T. Asuega, Velega Savali Jr., Levu Tulafono Solaita, Lemanu Peleti Mauga, Avegalio P. Aigamaua, Tiumalu Telesia Scanlan, Malepeai Setu and Fuata Dr. Tagiilima Iatala.

After he announced that the bill was rejected, Senate President Gaoteote Tofau Palaie says the Senate still has the next session of the legislature in July to tackle the issue of additional funding for LBJ.

The Senate president also suggested that the Senate at the same time should look at LBJ management, because there is no sense in providing more financial aid for the hospital if LBJ management does not know how to properly manage the money.

Gaoteote told senators that the special session called by the governor is officially closed, with the Fono to return the second Monday of July for the fourth and final session of the 32nd Legislature.

The bill was returned to the House yesterday with a communique from the Senate that the bill was rejected in second reading.

House Speaker Savali Talavou Ale informed House members there was no official communique from the Senate leadership that the special session is now closed, although he had just received verbal communication that the Senate had finished its work for the special session.

And if that is the case with the Senate ending the special session, the House Speaker said then that is also the case for the House, adding that the usual protocol is for both chambers to exchange communication that each chamber has finished a session or special session.


Prior to the Senate vote, the Senate Budget and Appropriations Committee, chaired by Sen. Lemanu Peleti Mauga, convened for a committee of the whole discussion on the House version of the bill, as the Senate had rejected last week its version of the proposal.

Velega, the first to address the meeting, said that after reviewing the House version, he had come to the conclusion that there is nothing new in this measure except for the fact that the House reduced the hike in excise taxes for beer, alcohol and tobacco; and reduced the increase in business license fees.

Under franchise tax, the House had amended the tax to be based on the corporation's annual gross sales receipts and revenue, and deleted the new 4% wage tax.

Fuata said he still had the previous concerns voiced last week in the Senate that this bill provides for an another tax burden on the public and the private sector. He recalled talking Tuesday to a hospital employee, who was very saddened by the reduction in working hours for personnel and then being hit with the new 2% wage tax that went into effect in February.

Fuata said this employee is now taking home less money, and additional taxes — from this bill — will have an even more serious impact on this worker as well as others in the community.

Mauga said the Senate has already identified additional funding for the hospital through the $2 million refinance loan bill under the government’s $20 million loan with the ASG Employees Retirement Fund. He said that is sufficient funding at this time, while more money for LBJ can be taken up at a later time.

Without anything new or interesting in the House version, Velega moved to report the bill to the floor for a final vote. Gaoteote echoed Velega’s statements and pointed out that estimated revenues to be collected from the amendments made by the House are just over $2 million —which is very similar to the $2 million refinance loan bill from the Senate pending in the House. “I do not support this bill,” said Gaoteote.

Fuamatu acknowledged his colleagues’ concerns as well as members of the community that new taxes and fees will be paid for by the public, but at the same time the hospital is in need of additional money for the off-island referral program.

He said his heart goes out to those individuals who will be forced to pay $50 to visit a doctor when the hospital ends up implementing the fee hike that was rescinded several weeks ago. He said if such a hike in LBJ fees does take affect, there is nothing the Fono can do because it will be in recess until July. He asked senators to remember the financial needs of LBJ when making their final decision on the House bill.

Paogofie argued that the House version lightens the burden on the community because the taxes and fees have been decreased. He said the hospital needs money for the medical referral program to be able to send patients off-island for treatment and it’s best for the Senate to address this urgent need now, instead of waiting for a later time.

Lualemaga said he is very supportive of the amendments made by the House in which the burden on the public has been greatly reduced. He said the Senate needs to do something to provide assistance for the hospital.

Velega countered that it is wrong for anyone to say that the Senate has done nothing to assist the hospital and recalled the $2 million refinance bill and the $3 million loan with the Workmen’s Compensation Account passed in February.

He also said that there are other available ASG funds to tap into for the hospital instead of taxing the community. For example, he says there are off-island ASG accounts, such as the tobacco settlement money to  provide money for LBJ. He said he would support this proposal if there were no other options available to the government.

Paogofie said this measure is a long term solution to fund the referral program, which is needed by the hospital, and LBJ cannot wait for another two years before the Fono can come up with a funding solution.

Mauga reiterated his objections to the bill and noted that he has serious concerns with LBJ management in handling funds provided by the government. He said the Fono can take up LBJ money matters — through the $2 million refinance loan — when the Fono returns in July.