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Still no consensus from Fono on $3 MIL for LBJ

More than $600,000 worth of claims following the 2009 tsunami were paid out from the Workmen’s Compensation Account while other claims are still pending, according to House Vice Speaker Talia Fa’afetai Iaulualo, during a Fono Conference Committee hearing, which sought to resolve differences between the House and the Senate over a $3 million funding bill for the LBJ Medical Center — the issue remains in conference.

This information was based on a House committee hearing held more than a week ago, in which Workmen’s Compensation officials testified on a proposal seeking to have this account fund $3 million for the LBJ Medical Center, Iaulualo said.

The conference committee — made up of three members each from the Senate and House — convened yesterday morning to reach a consensus on Senate bill (S.B. 32-26), which was approved by the House with several amendments, one of which would have the $3 million be a loan, to be repaid back with a new 2% wage tax.

During the committee hearing, Senate conferees, led by Sen. Alo Dr. Paul Stevenson along with members, Senators Velega Savali Jr. and Lualemaga Faoa, maintained the Senate objection to the House amendments, and want the bill returned to its original language with the $3 million as a direct payment to LBJ.

However, House conferees — led by Iaulualo along with members Reps. Pulele’iite L. Tufele and Vailiuama Steve Leasiolagi — disagreed.

With both sides unable to reach a final decision, additional members have now been appointed to the conference committee, with three additional members from each chamber.

The committee convenes at 9:30 a.m. today for another round of debate and will hopefully reach a final decision, which will then require endorsement of both the Senate and House.


Iaulualo said the House has already approved two Senate bills providing funding for LBJ. (The two bills — sent to the governor last Friday for approval — provide $1.2 million for LBJ and $800,000 as matching FEMA funds).

He said it had been difficult for the House to reach the final decision on S.B. 32-26 and had involved several hearings with testimony from the government as well as a report from the Legislative Finance Office (LFO).

In the end, the House opted to make the necessary amendments to reflect the $3 million as a loan, after hearing from Workmen’s Compensation officials, who testified that about $680,000 had been paid out in claims for the 2009 tsunami, said Iaulualo. Additionally, he said, there are outstanding claims of between $250,000- $300,000 pending with the Workmen’s Compensation.

He said it is the belief of the House that the money in this account is for a specific purpose. He said it’s “unfair for us to take money from one program to another” adding that LBJ’s money woes should not financially diminish another program.

According to the Manu’a lawmaker, the House members remain very concerned about taking out this money and not having it repaid, in the event that another disaster hits the territory, resulting in more claims. Therefore, the House agreed to a loan, to ensure that the money is paid back.

As for the 2% wage tax, Iaulualo said this was not an easy decision to reach especially now, during a political season.

Velega responded that the Senate itself received a Workmen’s Compensation report, which shows a balance in the account of $4.56 million as of Dec. 31, 2011. Additionally, the report also outlines spending. (The Senate was also informed last year, that about $100,000 goes into this account every month.)

He said guessing about an unknowing future disaster is just that, guessing, while the dire financial situation at LBJ is not a guessing game, it’s the real thing. As to the 2% wage tax, he said politics should not play any role in making a decision on the tax.

The Manu’a senator explained that the Senate expedited S.B. 32-26 because of the urgent financial need for the hospital and this measure provides a solution to the hospital’s request for urgent funding. He called on the House conferees to work together with the Senate in moving this measure forward with a direct payment of $3 million, saying that any other matters pertaining to LBJ can be discussed tomorrow, which is a new day, when the sun will rise again.

Iaulualo responded that the House fully supports the proposal but only minor amendments were made based on the House hearings. He also said that the House review of LBJ finances didn’t clearly provide a status of the financial situation faced by the hospital.

He did point out that the LFO analysis of LBJ finances found that between $4 million and $5 million is needed — but not the $15 million that was requested by the hospital. He also informed the conferees that top officials of LBJ are earning high salaries such as the chief executive officer, chief financial officer and the in-house attorney, who does not provide legal service for LBJ, while this huge salary is allocated in the budget.

He said the House believes that the $3 million should not be taken out without replenishing the Workmen’s Compensation Account.

Velega responded, saying the House is raising past issues such as high salaries and questioned why those issues are being raised now. He asked the House to put aside these matters and concentrate on providing financial support for LBJ.

He also said the word “loan” is not a good word to him, because the government has too many loans. He said there is cash available now and if the money is needed, the Fono should work on making it happen. “The hospital needs help now,” he added.

However, Iaulualo said the $3 million as a direct payment to LBJ will not pass the House, unless it’s a loan.

Sen. Lualemaga Faoa asked the House conferees not to use the statement, ‘that the House will not accept the bill unless it’s a loan’, because that means the Fono is not taking any action to help the hospital. He acknowledged concerns by the House regarding taking money out of the Workmen’s Compensation without replenishing’, but echoed Velega’s statement that LBJ needs money now.

If “we continue to debate this issue, it’s not going to resolve” the hospital's need for a quick cash-infusion, said Lualemaga, who then praised the House conferees, who were elected to the House as well as selected as conference committee members because of their wisdom and foresight.

Alo agreed with concerns from the House conferees regarding the actual status of LBJ’s financial situation, saying that additional time is needed by the Fono to conduct a thorough review. He recalled two separate loans over the past years totalling $15 million to the hospital and now there is this financial crisis.

So the Fono will need time to review all these matters, but lawmakers first need to deal with the financial crisis at hand, he added.