Pago Pago, AMERICAN SAMOA — The latest American Samoa Government (ASG) General Fund Report shows significant economic shifts from Q2 FY2023 to Q2 FY2024. They mark a transition from a surplus to a substantial deficit.

Samoa News should point out that amendments to the ASG Q2 General Fund Report is possible, or could show up in the Q3 report, showing a surplus instead of the current deficit it portrays.

However, the current ASG Q2 General Fund Report shows the territory’s financial position as shifting from a surplus of $6.5 million in Q2 FY2023 to a deficit of $11.9 million in Q2 FY2024, resulting in a negative swing of $18.4 million.CThe total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories.

Individual tax collections increased by $5,949,628, or 30%, indicating higher personal income levels or improved tax compliance.

However, corporate tax collections saw a significant decrease of $6,999,420, or 39%, pointing to challenges within the business sector, potentially due to economic instability or reduced profitability.

Excise tax collections, which are critical indicators of retail activity and consumer confidence, fell sharply by $1,234,768, or 44%, suggesting lower consumer spending and reduced sales expectations.

Charges for services, which include fees collected for various government services, decreased by $567,124, or 21%. This downturn is mirrored in port charges, which also fell by 25%, amounting to a reduction of $567,124. The decline in both service charges and port charges aligns with the drop in excise tax collections, indicating a broader trend of reduced commercial activity and lower inventory purchases by businesses.

The financial report also highlighted a dramatic decrease in indirect costs, which fell by $2,144,479, or 99%.

Indirect costs typically include overhead expenses allocated to various departments and projects, and such a steep decline could reflect budget cuts or reallocation of funds.

Transfers in, which consist of funds transferred from other programs or grants, decreased by $1,347,904, or 70%. This includes a significant drop in transfers from the Junior Reserve Officers' Training Corps (JROTC) program, which fell by $1,970,984, or 95%. Conversely, transfers from the Department of the Interior (DOI) Operating Grant increased by $729,999, or 17%, providing some financial relief amidst the overall decrease.

One positive aspect in the financial report is the increase in interest income, which rose by $3,544,055. This increase is primarily due to interest earned on American Rescue Plan Act (ARPA) funds held in Zions Bank- Utah.

The interest income provides a crucial buffer against the declining revenues from other sources and highlights the importance of federal funds in stabilizing the territory’s finances. (Samoa News should point out that any spending of this interest income by the government must go before the Fono for approval first before being used.) 

In total, collections from all sources decreased by $3,318,888, or 9%.

This overall decline in revenue, coupled with an optimistic year-to-date budget increase of $13,061,750, has led to the challenging financial situation for the ASG. The transition from a surplus to a deficit within a year underscores the volatility in the territory’s economy and the need for strategic financial management.

The data presents a mixed picture of the American Samoa economy.

The increase in individual tax collections suggests some positive trends in personal income or tax compliance, while the decrease in corporate and excise tax collections highlights potential underlying economic weaknesses such as reduced business activity and lower consumer spending.

The sharp declines in charges for services and port charges further suggest a slowdown in economic transactions and trade activities.

 The total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories. The total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories. The total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories. The total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories. The total tax collections for Q2 FY2024 dropped by $2.6 million, or 5%, compared to the same period in FY2023. This decline encompasses several key tax categories.

A broader picture of the local economy was presented to ASG in June this year for FY 2022.

The data from the 2022 Economic Census of American Samoa which was released by the US Census Bureau shows that there were increases in the Territory’s sales and other measures of employer business output for nearly every sector of the economy, as compared to the last economic census taken in 2017.

US Census Bureau officials Michael Sprung, the Assistant Survey Director (right) and Robert Nusz, Assistant Survey Director Staff Chief presented the 2022 Economic Census of American Samoa in a press conference at the DOC conference room.

Commenting on the 2022 economic census data, Nusz stated that overall it wasn’t as bad as he’d expected.

“I would say it’s not as bad as expected because the last time we did this was before the pandemic, now we’ve collected statistics after the pandemic, it’s a little bit of a gauge as to the effects of it, but it wasn’t as bad as I was expecting,” he pointed out.

Referring to the increases witnessed in American Samoa with regard to the number of business establishments, the combined revenue of all the sectors of the economy, payroll and the number of employees, he stated that it could be attributed to pandemic assistance or it could show signs of inflation.

Samoa News notes that Q2 FY2024 data is post pandemic, showing no new injection of COVID-19 funds.