Projected $55 million revenue shortfall revealed at State of Territory
Pago Pago, AMERICAN SAMOA — Governor Pulaalii Nikolao Pula painted a grim picture of the American Samoa Government's finances in his first State of the Territory address. This speech marked the official opening of the First Regular Session of the 39th Legislature, held yesterday morning at the Governor H. Rex Lee Auditorium.
He began in Samoan and quoted Mark Antony's speech from Shakespeare's play Julius Caesar, saying, "I come to bury Caesar, not to praise him."
"That is how I feel today," Pulaalii stated. "Lt. Governor Pulu and I are not here to criticize or point out any discrepancies of the previous administration and seek praise for our administration. No. We want to clarify and lay out the current state of our government."
The newly elected governor revealed a projected $55 million shortfall in local revenue for the current fiscal year. In the first quarter of Fiscal Year 2025, ASG collected $28 million in local revenues. At this rate, the total revenues projected for the year would only amount to $111 million, a $55 million shortfall from the $166 million approved in the FY 2025 Budget.
The governor stated that the government is struggling to make payroll every two weeks. The payout of over $1 million for political appointees from the last administration has made it even more difficult to meet payroll, Governor Pulaalii revealed, while also speaking of other debts.
"I regretfully inform you that the monies owed by ASG to the ASG Retirement Fund have not been paid for almost six months," he stated. "At last count, ASG owes the Retirement Fund almost $9 million.
“ASG has fallen behind in paying ASPA bills and the ASCC subsidy,” he further revealed.
"We have learned that many obligations are not in its official accounts payable ledger. Apparently, proper procurement processes were bypassed. The extent of this is still being discovered.
“We have already taken steps to ensure that this administration does not allow the procurement process to be bypassed. This situation is no doubt familiar to some of you members of the Fono."
The governor mentioned that there might be more unapproved spending, similar to the $36 million already identified. He also revealed that a lawyer from a local company had recently confronted the administration, claiming it owed them $10 million. However, there was no record of this supposed debt.
"American Samoa received an extraordinary amount of funds from the federal government over the past few years through the COVID-19 pandemic and the American Rescue Plan Act (ARPA), far in excess of the level of federal support we normally receive," he stated.
"This funding will not continue in the future. President Trump's administration will no doubt have different priorities for the allocation of funds. We need to ensure our government budgets are not based on the unusually high federal funding levels of the past four years."
Though the full picture of ASG's finance status is not yet known, Pulaalii said it is certain that ASG spending must be reduced to make payroll. He referred to his January 8 memo regarding cost containment measures. Additionally, he has frozen expenditures on most of the 44 projects under the Special Programs Project, which will be reviewed on a case-by-case basis.
The governor indicated that the government would return to the Fono for a possible recession or reallocation of special programs.
He also asked that the Fono and the Judiciary consider taking cost containment measures, though he acknowledged the separation of powers between the three branches of government.
Governor Pulaalii said he will be attending President Trump's inauguration at the nation's capital next week and will also be attending the National Governors' Association's Winter Meeting in February.
"Pulu and I intend to make a strong case in DC for continued and increased federal support for our intensely patriotic American outpost," he said. "We will work with the Fono and Congresswoman Uifaatali Amata Coleman-Radewagen to ensure that we speak with one strong, unified voice.
"Finally, we promised the people of American Samoa that we would request a forensic audit of past spending if elected. The Fono will be kept informed as we take action on this promise.
"At the same time, we are restructuring the Governor's Office to help Pulu and I implement changes that we feel are needed in the American Samoa Government.
“The current budget approved 220 positions for the Governor's Office. However, we will reposition certain programs and personnel to improve efficiency, collaboration, and alignment," he declared.
In conclusion, Governor Pulaalii requested the Fono's support in confirming the new cabinet members, as the new administration attempts to rectify the many financial problems they have identified to better serve the people of American Samoa.
He concluded his speech by reciting the final words of the oath of office that he and Pulu had recited when they were sworn in: "So help me God."
Responding on behalf of the Fono, Senate President Tuaolo Manaia Fruean assured Pula and Pulu that the Fono was "locked and loaded, ready to fire," referring to the directors' confirmation.
"Pula and Pulu, keep hope alive," Tuaolo urged. "Plato said, 'The stronger the wind blows, the higher the bird flies.' Pula and Pulu, fly high but follow the law."
The Senate president referred to the governor's revelation about the $55 million shortfall in local revenues. He recalled that when the former administration submitted their proposed budget of $166 million in local revenues for FY 2025, the Fono proposed a reduction to $135 million, which was more realistic.
"But the Treasurer responded, 'That was your time, this is my time,'" Tuaolo recalled. "Now look what has happened. Someone has to pay the price for this."
He was referring to the Treasury budget hearing chaired by Vice Chairman of the Senate Budget and Appropriations Committee, Senator Magalei Logovi'i, in the absence of Chairman Utu Sila Poasa, who was off-island at the time.
Magalei, a former Government Treasurer, had advised then-Treasurer Malemo Tausaga that the $166 million in local revenues was not feasible and cited similar situations during his tenure as treasurer.
However, Malemo was adamant that local revenue collections would meet the projected amount.
"That was your time, this is my time," he argued.
Senate President Tuaolo, who is also the chairman of the ASG Retirement Fund Board of Directors, said he can hardly sleep at night because he is worried about members' money. He stated that their contributions to the Retirement Fund must be paid.
Tuaolo also mentioned that the Vice Chairman of the Board for Higher Education had met with him regarding the ASCC subsidy, which was part of the budget but the government still hasn't paid.
He said that the Fono cannot give a response at this time as it wants a clear picture of the government's financial status.
"We want to know where we stand financially," Tuaolo emphasized. "Audit the government and present the findings so that the public can understand our current financial predicament. If they know and understand everything, there will be no complaints."
He stated that the problems the government is facing are greater than those faced by much larger nations, attributing this to dishonesty among people. He suggested that perhaps it is God's will for them to be elected into office to address these issues.
He emphasized that there should be one law for everyone, and top government officials should not use their positions to enrich themselves.
Tuaolo also advised Governor Pula to instruct his nominees for directors to hold off on any personnel changes until they are confirmed. He noted that he has received complaints from some government employees whose services have been terminated by acting directors.
He pointed out that these employees are constituents of members of the Fono.
Tuaolo concluded by quoting the late Catholic Archbishop Alapati Mataeliga's motto, "To serve, and not to be served."
BACKGROUND
The Acting director of the Department of Commerce, Madeline L. Petaia in one of her first moves in taking leadership has removed two of its assistant directors — Michael McDonald and Victor Tuiasosopo — citing advice of the Department of Human Resources that their employment as political appointees ended on Jan. 3, 2025. The removals were said to have been handled via email.
It should be noted that while Tuiasosopo is a contract employee, subject to possible employment termination, McDonald is listed as a career service employee. It’s unknown at this time, if McDonald’s removal includes termination of government employment, which would involve a different set of protocols for termination from those of a contract worker.