ASG Treasurer forecasts a surplus of $2Mil for 2016
Based on the current trend of revenue collection and spending, ASG Treasurer Uelinitone Tonumaipea is forecasting a surplus of about $2 million at the end of the current fiscal year 2016 budget, which closes Sept. 30, 2016.
On the other hand, the government ended FY 2015 with a surplus of over $3 million, based on FY 2015 audits.
Tonumaipea’s comments were made yesterday during day one of the Fono joint budget committee hearing reviewing the government’s FY 2017 budget totaling $378.48 million.
The Treasurer and Budget Office director Catherine Aigamaua Saelua were the first witnesses for the hearings, which are scheduled to last until Sept. 13, at the Senate chamber.
Before the hearing, the ASG preliminary and unaudited revenue report as of June 30, 2016, provided by the Treasury Department, was distributed to lawmakers. For FY 2016, the government’s approved local revenue budget stands at $106.01 million with taxes — ASG’s largest funding source — at $66.50 million.
And ASG’s projection of taxes has always been a contentious point of argument between the executive branch witnesses and several lawmakers in the past years during budget hearings.
According to the revenue report, as of June 30, total taxes collected comes to $46.69 million — with $8.50 million in corporate tax; $19.64 million for individual income tax; $1.67 million in military cover over tax; and $16.86 million for all excise taxes, including the soda tax.
At the outset of the hearing, Tonumaipea explained the funding sources for ASG’s proposed $106.16 million for local revenue, with taxes the largest source of revenue at $67.54 million for the FY 2017.
Based on the FY 2016 revenue report, Sen. Magalei Logovi’i, a former ASG Treasurer, points out a possible shortfall in tax collection with only one quarter left for the current fiscal year. He says ASG’s approved taxes collection for FY 2016 is just over $66 million while the revenue report shows only $46.69 collected up to June 30.
According to the FY 2017 summary, ASG collected $67.20 million in FY 2015 and $64.09 million in FY 2014. And Uelinitone pointed to these actual collection amounts that ASG achieved in FYs 2015 and 2014. He projects that ASG will collect the $66.5 million for FY 2016.
He said that based on two consecutive fiscal years (2015 & 2014) companies usually make their tax payments during in the last quarter of the fiscal year — which is July 1-Sept 30.
In addition, there are new companies opening up here such as Philippines based AVM Bernardo Engineering, building multipurpose food processing plant, that will be paying taxes in the last quarter.
“So we’re going to make the $67 million” in taxes, he said.
Responding to more questions from Magalei, the ASG Treasurer said the FY 2015 audit is completed and ASG has a surplus of $3.99 million. Some lawmakers requested a copy of the audit report.
Two questions surfaced during the hearing on what ASG is doing to attract new businesses to the territory to further increase corporate tax, and Tonumaipea said there are companies looking to American Samoa, including Datamatics Global Service Ltd. (which is looking to set up a call center in the territory).
Senate President Gaoteote Tofau Palaie interjecting saying that questions should focus on the “big picture”, which is the FY 2017 budget before the committee, but not what’s in the future, because the FY 2017 budget deals with what revenues the government is able to collect in the new fiscal year.
Responding to another lawmaker’s question, Tonumaipea explained that just because the amount in the budget provides a certain figure for expenditures, that doesn’t mean the government, is going to spend that money.
He says ASG spending depends on what’s collected. And based on the current trend of revenue collections and expenditures, Tonumaipea is projecting a surplus of just over $2 million for FY 2016.
House Speaker Savali Talavou Ale asked about the huge decrease in Enterprise Fund for FY 2017 compared to FY 2016, and ASG witnesses told lawmakers that it deals with the 38% drop in the FY 2017 proposed budget for the American Samoa Power Authority.
Lawmakers decided to wait until ASPA’s budget hearing next week Tuesday afternoon to find out more. However, the governor had informed lawmakers in his FY 2017 budget summary letter that decrease in ASPA’s budget of $44.01 million is primarily due to the drop in the cost of fuel and completion of disaster related FEMA projects.
After questions were asked of the overall ASG budget, with no specific questions on overall expenditures for FY 2017, the joint-committee moved to questioning the FY 2017 budget proposals for Treasury Department and Budget Office.
Sen. Tuaolo Manaia Fruean pointed out that Treasury has the same budget amount of $5 million in FY 2016 proposed for FY 2017. He says this is the same with the Budget Office proposal of FY 2017 with the same amount $720,000 in FY 2016. He says there are no changes for both ASG entities and he moved to dismiss the witnesses, which was approved by the committee.
Overall the hearing on the overall ASG budget as well as the two ASG entities lasted about 45-minutes — much shorter than in previous years.
Before Tonumaipea and Saelua were called to testify, the committee held a 10-minute discussion to set the tone of the budget hearings. Tuaolo raised the issue of departments and offices with the same budget amount for FY 2016 and FY 2017. He wanted to know if questions should still be asked when there are no changes in the budget amounts.
Senate Budget and Appropriations Committee chairman Sen. Laolagi F.S. Vaeao says the joint committee can introduced a motion to forgo the hearing for such an office/department and if endorsed by majority of the committee, the witnesses will be dismissed.
Gaoteote suggested giving all lawmakers, who are present at the hearings, a chance to ask questions. He also asked everyone to be patient during the hearings and not to walk out of the chamber, when the lawmaker is not given the chance to ask a question.