Pago Pago, AMERICAN SAMOA — Governor Pulaalii Nikolao Pula has imposed a temporary halt on all local fund expenditures in an effort to tighten government fiscal control. The freeze, which took effect on Wednesday, April 1, 2026, and extends through Friday, April 10, 2026, is intended to give the administration room to address what the Governor describes as a significant backlog of outstanding payments.

In a memorandum issued on March 31, Governor Pulaalii explained that the pause is designed to stabilize the government’s financial position and prevent further strain on local revenues. During the ten‑day freeze, no spending from local funds will be authorized, with only two exceptions: payroll obligations and overtime for first responders. All travel approvals are suspended, and no personnel transactions will be processed.

The Governor emphasized to directors that immediate compliance is essential, framing the directive as a necessary step to safeguard the government’s collective financial stability.

Last Wednesday, during his appearance on the 93 KHJ morning show with host John Raynar, Governor Pulaalii Nikolao Pula expanded on several financial and political challenges facing the territory, offering both historical context and an explanation of the decisions guiding his administration.

Reflecting on the Fiscal Year 2025 budget, the Governor noted that the Fono had approved roughly $166 million in local funding, which—combined with more than $600 million in federal dollars—brought total government resources to over $700 million. He said that upon taking office, he directed his team to conduct a comprehensive review of local revenue trends dating back to former Governor Coleman’s administration, focusing specifically on how expenditures had compared to actual collections over time.

According to Governor Pulaalii, the review showed only two significant reductions in local spending in the past several decades: a $3 million cut under former Governor Lutali and a $1 million cut during one fiscal year under former Governor Togiola. He said this historical pattern illustrates the need for a more realistic approach to budgeting.

“The idea for me was to go back to the beginning and look at the expenditures and revenues of the government and determine where we are,” he explained. “When I came in, I was under the assumption that the government has more than 7,000 employees. With a population of 50,000 plus, that’s a lot of workers — more than ten percent. So, I figured, we have to live within our means. It’s just common sense.”

He said this was the basis for his decision to reduce the FY 2026 budget by $25 million, noting that by the end of the fiscal year, the government would not have collected the full $166 million in local revenues projected for FY 2025. “It was very close,” he added.

The Governor also pointed out that while the Executive Branch’s proposed revenue estimate for FY 2026 reflected the $23 million reduction, the Judiciary’s budget request remained unchanged, and the Legislature’s request increased.

He stated that he was somewhat disappointed because of what he described as attacks by lawmakers in their line of questioning during the budget hearings.

“The line of questioning was demeaning and very hostile, and I couldn’t figure out why,” Pulaalii said.

The Governor said one of the most immediate challenges confronting the Executive Branch when he took office in January 2025 was the looming obligation to pay $9 million owed to the Retirement Fund — a debt originating under the Lemanu and La‘apui administration. That amount, he noted, has since grown to approximately $17 million.

Governor Pulaalii reiterated that the shortfall traces back to a 2020 law passed by the Fono and signed by former Governor Lemanu, which increased employee contributions from 2 percent to 6 percent. The law also required the government’s employer contribution to rise from 8 percent to 14 percent. While the mandate significantly increased the government’s financial responsibility, he said no new revenue stream was created to support the higher payments.

He emphasized that without a sustainable solution, the Retirement Fund will continue to face pressure as more employees retire and the government remains obligated to pay out benefits.

“We need to sit down and fix this because I don't want the Retirement Fund to keep decreasing,” the Governor said, warning that without corrective action, the Fund’s balance will continue to decline while obligations grow.

The Governor said he remains in ongoing discussions with the Fono over the Retirement Fund shortfall, noting that draft amendments are already circulating as both branches search for a workable solution. While staff from the Executive Branch and the Legislature meet regularly, he believes the leadership itself needs to sit down more often to address the issue directly — one of the reasons he formally requested a meeting with the Fono leaders.

Governor Pulaalii recalled that when the recent incident involving his Chief of Staff occurred in the House of Representatives while he was off‑island, he initially considered sending a letter informing lawmakers that he had halted director appearances before the Fono due to what he viewed as increasingly hostile treatment. In the end, he chose not to escalate the situation. Instead, he sent a letter to the Speaker and Senate President requesting a meeting to discuss pressing government matters—an invitation they declined.

“The Chief of Staff issue to me, although I regret that it happened and it is unfortunate that it happened, is not the important part of running the government,” the Governor said. “The important part is for us to work together moving forward regarding the operations of the government.”

He emphasized the scale of the government’s financial obligations, pointing out that payroll alone requires $12 million every month, or $120 million over ten months. With such a large share of local revenues consumed by salaries, he said, the Executive and Legislative branches must focus on how to sustain essential services and fund government operations.

“These are important issues we need to talk about,” he emphasized.

BACKGROUND

The Chief of Staff issue arose from questions about the governor paying directors that were not approved by the Fono, and had had their salaries/ compensation  removed from the budget as a result. The governor from his remarks on the morning show does not address that elephant in the room — use of funds without Fono approval — instead saying the confrontation itself is not an important part of running the government. The Fono has said that they are taking the matter to court for resolution.

Of note: the Fono budget is from local funds and as such, are subject to the governor’s 10-day freeze on expenditures, barring payroll. Whether the Fono leadership will abide by the freeze demand remains to be seen.