Pago Pago, AMERICAN SAMOA — Governor Pulaali'i Nikolao Pula has signed the Fiscal Year 2027 budget bill into law on October 1, 2026, allowing government operations to continue into the new fiscal year. However, he exercised his constitutional line-item veto authority to remove several appropriations approved by the Fono.

Among the items vetoed by the Governor were a $79,000 reduction to the Department of Legal Affairs budget, $150,000 for the Shoreline and Disaster Access Road project in Manu'a, $50,000 for Swains Island transportation, $210,000 for emergency road repairs in Nua and Seetaga, and approximately $11.9 million in Capital Improvement Program (CIP) projects.

As a result of the vetoes, those appropriations will not receive funding under the FY 2027 budget.

In his review of the budget legislation, Governor  Pulaali'i restored the $79,000 that lawmakers had removed from the Department of Legal Affairs budget. The reduction had affected funding allocated for the salaries of certain department directors, and the Governor directed that the funding be reinstated.

The Governor also explained his reasons for striking several items from the Special Programs budget.

According to the administration, the $150,000 allocation for the Shoreline and Disaster Access Road project in Manu'a duplicated funding already provided elsewhere in the budget under shoreline protection initiatives for the Manu'a Islands.

With respect to the $50,000 appropriation for Swains transportation and the $210,000 allocation for emergency road repairs in Nua and Seetaga, the Governor noted that neither item was included in the original Special Programs budget submitted by his administration. Both appropriations were added later during the Legislature's budget review process.

Governor  Pulaali'i also vetoed funding for Capital Improvement Projects, citing uncertainty regarding federal funding. He explained that the territory had not yet received its FY 2027 Capital Improvement Program award letter from the U.S. Department of the Interior, making it premature to appropriate funds that had not yet been formally awarded.

In a cover letter accompanying the budget bill, the Governor emphasized that his use of the line-item veto was not intended to undermine the Legislature's appropriations authority. Instead, he described it as part of the constitutional system of checks and balances designed to ensure fiscal accountability.

He pointed to Article II, Section 9 of the Revised Constitution of American Samoa, which grants the Governor authority to reject specific appropriations while approving the remainder of a budget measure.

According to the Governor, the provision allows the chief executive to disapprove spending items that may conflict with sound fiscal practices, legal requirements, or the broader public interest, while permitting the rest of the government's operating budget to take effect.

Although he approved the overall budget, Governor Pulaali'i expressed concern about several reductions made by lawmakers, particularly the cut to the Medicaid local matching fund.

MEDICAID CUT

The Legislature reduced the local Medicaid matching appropriation from $6 million to $3 million, a 50 percent decrease. The Governor warned that such a reduction could have serious consequences for healthcare services relied upon by many residents.

He stated that the lower funding level poses a significant risk to the territory's ability to maintain Medicaid services and could affect healthcare assistance provided to eligible beneficiaries throughout American Samoa.

The Fono's decision to reduce the Medicaid local matching fund by 50 percent has drawn criticism from community advocates and organizations that provide healthcare and support services to some of the territory's most vulnerable residents, including senior citizens, adults with disabilities, medically fragile individuals, and low-income families.

Among those voicing concern is former Department of Commerce Director and current American Samoa Government Employees Retirement Fund (ASGERF) Board of Trustees member Keniseli Lafaele, who recently published a commentary titled "Protect Medicaid Funding, Protect Our People and Our Healthcare Economy." In the article, Lafaele urged lawmakers to reconsider the reduction of the Medicaid subsidy from $6 million to $3 million in the FY 2027 budget. (See in today’s issue)

Lafaele argued that the proposed cut could have far-reaching consequences beyond the healthcare system, affecting patients, family caregivers, healthcare providers, and the territory's broader economy. He stressed that Medicaid funding is critical for elderly residents who depend on daily assistance, individuals living with disabilities or recovering from serious medical conditions, bedridden patients requiring professional care, and family members who rely on support services to care for their loved ones at home.

His concerns have been echoed by service providers working directly with these populations.

One such organization is Empowering Pacific Island Communities (EPIC), which operates programs in American Samoa for seniors and individuals requiring long-term care and support services. EPIC Executive Director Kathryn McCutchan expressed appreciation for Lafaele's advocacy and the attention he has brought to the issue.

McCutchan noted that EPIC opened American Samoa's first community-based Adult Day Services Center in Vailoa on April 14, 2026, with the capacity to serve up to 10 elderly adults and adults with disabilities. She said the organization is also preparing to expand services through additional sites in Amouli and the Tualauta District.

In addition to its day-service programs, EPIC currently employs a team of approximately 16 to 18 Home and Community-Based Services (HCBS) caregivers who provide in-home care and support to families throughout the island.

Despite those efforts, McCutchan said the demand for services continues to outpace available resources.

"We maintain an extensive list of individuals who need these services but cannot afford private fees," she explained.

According to McCutchan, Medicaid is the primary source of funding for long-term care services and support programs for low-income families across the United States and its territories. For that reason, she said she was surprised and disappointed to learn that additional provider enrollment had been halted despite federal approval of the services.

"Medicaid is the primary payer for long-term care services and supports for low-income families throughout the country," McCutchan stated. "For that reason, I was shocked and deeply disappointed when the Medicaid Director informed EPIC that the office could not enroll additional Personal Care and Home Health providers, despite CMS approval of these services."

She warned that without adequate local matching funds, American Samoa could face challenges expanding access to critical home-based and community-based care programs, potentially leaving many elderly residents, individuals with disabilities, and their families without the support they need.

The growing concern among healthcare advocates highlights the broader debate surrounding the Medicaid funding reduction, with critics arguing that cuts to the local match could limit the territory's ability to leverage federal Medicaid dollars and expand services for residents who depend on them most.