The Fono Joint Budget Committee has agreed to keep the fiscal year 2015 budget ceiling of $424.48 million — which includes just over $106 million in local revenues — however,  two major changes will be made: One to allocate funds for the proposed pay hikes for the governor and lieutenant governor and the other to pay Medicare matching funds.

The joint committee convened yesterday to debate the final language of the budget bill, which needs to be approved by the Fono and submitted to the Governor’s Office before 12 midnight on Sept. 30.  FY 2015 begins Oct. 1, 2014. 

The joint budget committee is co-chaired by Sen. Laolagi F.S. Vaeao and Rep. Timusa Tini Lam Yuen, chairman of the respective Senate and House Budget and Appropriations committees.

AMENDMENTS

There were two major amendments proposed toward the end of the budget debate: the $370,000 Medicaid matching funds and some $65,000 to cover the proposed pay hikes for the governor (from $85,000 to $125,000) and lieutenant governor (from $75,000 to $100,000) that are made through a separate bill pending in the House.

Laolagi told lawmakers that he will look into the Governor’s Office budget to identify funds for the Medicare matching funds, as these are required or American Samoa will lose Medicaid funding for the new fiscal year.

Senate President Gaoteote Tofau Palaie suggested that Laolagi and Timusa look at the American Samoa Visitors Bureau budget of $900,000 to secure money for the matching funds; and also pointed out that there is a bill pending which deals with pay hikes for the governor and lieutenant governor and this needs to have a funding source.

He suggested money from the Visitors Bureau budget to fund the pay hikes, adding that the Fono office allowance increases — which are in a Senate bill pending in the House — is included in the Fono FY 2015 budget.

Gaotetote went on to say that pay scales for the chief executive officers of our semi autonomous agencies range from 100,000 to $150,000 annually — much more than the governor and lieutenant governor.

BUDGET DEBATE

At the start of the hearing, copies of three financial reports, covering the first nine months of FY 2014, were distributed to lawmakers. Based on information announced at the hearing, the Treasury report forecasts ASG to collect $99 million in local revenue at the end of FY 2014, while the Budget Office report projects collecting just over $95 million.

The third report is from the Legislative Financial Office, which analyzed data from ASG, and found that the government is projected to collect just over $90 million in FY 2014 (while the forecast is $108 million in local revenues for FY2014).

Laolagi also pointed out that ASG’s FY 2013 independent audit report shows that the government’s actual revenue collection was around $90+ million.

Despite the differences in the total revenues expected to be collected in FY 2014, Laolagi says he believes the Treasury Department report should be the official one since this is the department responsible for major revenue collections.

The biggest issue debated by the joint committee focused on whether or not ASG would be able to collect the projected $106 million for FY 2015.

Rep. Taotasi Archie Soliai suggested that before the joint committee makes a final decision, the ASG Treasurer be called back to provide new revenue updates that include July and August. He said that during a recent House hearing, the Treasurer said that there was a 20% increase in revenue collections in July.

Gaoteote says he agrees with Laolagi that the Treasury report should be the official document for the Fono to use when debating financial issues, adding that the total dollar amount for FY 2015 should be finalized based on information and data provided to lawmakers.

Responding to questions from lawmakers, Laolagi said he and Timusa had come up with a “suggested” total in local revenues which is $100 million — allocating $25 million for each of the 4 quarters — while $6 million is cut from the Special Programs budget category, and Communications can be included in the final budget.

If the government exceeds more than $25 million in a quarter,  a supplemental budget can be submitted for Fono approval to cover funding cuts from the Special Programs, Laolagi said.

Sen. Magalei Logovi’i said that the Treasury report, is the “bible” when it comes to government finances and it is the official one. He also agreed that a supplemental appropriations bill can be submitted later to cover any programs which funding was reduced during the budget debate, if collections exceed revenue projections.

He argued that if the Fono uses $106 million but if the collection is much lower at the end of FY 2015, then lawmakers will be blamed for knowingly accepting this amount while the Treasury report now forecasts only $99 million to be collected in FY 2014.

Gaoteote added: “The question is — will the government collect the $106 million?”.

House Vice Speaker Talia Fa’afetai Iaulualo said he believes the government will collect the $106 million projected in FY 2015 and suggested to keep this amount “as is” — which means, no change to the entire budget ceiling.

House Speaker Savali Talavou Ale agreed, and reminded lawmakers that the administration has reduced by over $2 million local revenues in FY 2015 compared to the $108 million in FY 2014. He also pointed out that FY 2014 is not over yet and collections could be more than projected.

(Samoa News should point out that neither men offered a reason or explanation for their belief that the government will collect its projection for FY2015, despite evidence from past years that collections fell short.)

There was a tense moment in the debate during an exchange between Laolagi and Savali, but Gaoteote interjected to bring calm to the committee. Both Laolagi and Savali later offered apologies to each other as well as to the other lawmakers.

There were two motions for consideration put forth to the joint committee: Go with the $106 million as presented by the administration or go with the $100 million suggested by Laolagi. In the end, the majority voted for the $106 million.

At the end of the hearing, Rep. Larry Sanitoa appealed to the Fono leaders to talk to the Governor about paying increments for ASG employees now that the Fono has endorsed $106 million in local revenues.

Sanitoa says it has been 4 years since any increments were paid, and the fact is employees under grants are getting their increments.

Laolagi suggested to the committee that this issue can be requested to the governor through a concurrent resolution from the Fono.

Asked after the hearing for his overall reaction to the budget debate, Laolagi told Samoa News that he and Timusa presented to the joint committee all necessary reports as well as the suggested $100 million for local revenue, but in a democratic society, the majority rules.

“I did my best along with my co-chair and we are proud of the work that we did, including the three-weeks of budget hearings,” he said. “I am hopeful that the administration will collect all of the local revenues projected for FY 2015.”

As for the two amendments suggested for the budget, Laolagi said the Legislative Financial Office is now working on this matter and if they complete the task today, the FY 2015 budget bill will go through second reading in both the Senate and House.

There is no word when the bill raising lawmakers office allowances across the board by $10,00 will be heard in the House. Funding for the bill is already in the increase of $600,000 found in the FY 2015 Fono budget, and passing the budget will made these funds available to the Fono to spend as they see fit. The Fono is funded totally by local money.