Admin’s proposed 2022 budget is $552 million — a 19% increase

Pago Pago, AMERICAN SAMOA — The Lemanu & Talauega Administration’s proposed final budget for fiscal year 2022 — which begins Oct. 1st this year —  is more than $552 million, an increase of 19% from the current FY 2021 approved budget.

The ASG budget was transmitted to the Fono yesterday morning as Gov. Lemanu Peleti Palepoi Sialega Mauga was at the same time scheduled to deliver a special address to a joint session of both the Senate and House for the opening of the Second Regular Session of the 37th Legislature.

The governor’s address was delivered in Samoan, covering a wide range of issues including the final proposed FY 2022 budget, which he says has the same ceiling of $110.16 million for local revenues as FY 2021.

The “executive summary” final budget booklet distributed to lawmakers yesterday shows that $80.24 million of local revenue goes to the general government; $8.11 million for the Legislature; $3.27 million to the Judicial Branch and $18.53 million for Special Programs, which is administered by the Governor’s Office.

The governor informed lawmakers that the total FY 2022 budget submitted yesterday morning to the Fono is $552.78 million — to be funded with $110.16 from local revenue; $219.59 million in federal grants; $212.85 million under Enterprise Funds — which includes budgets for ASG’s semi autonomous agencies or authorities — and $10.26 million in Capital Improvement Projects.

The governor told lawmakers that the FY 2022 budget increased about 19% from the current fiscal year’s approved budget of $465.95 million.

The FY 2022 final budget “executive summary” booklet distributed to lawmakers yesterday shows that the increase in total budget is more than $84.78 million in federal grants and $2.06 under the Enterprise Fund.

“The overall total increase is attributed to the significant surge in federal grants,” the governor said, and points out that ASG is responsible for the financing of approximately 58% of its planned expenditures for FY 2022 to maintain the quality of services rendered to local residents.

“This means only 42% of the budget is absorbed by federal grants,” he said.

For local revenue set at $110.16 million, the governor said this projection is a conservative estimate consistent with expected revenue trends.

“The stability in local revenue collection is attributed mostly due to the current and expected climb in business activities amid COVID aid including reopening borders,” he said. “Attaining a solid local revenue base is consistently the goal, thereby allowing us to finance our priorities to advance our territory.”

Of the total local revenue, 70.2% is allocated to personnel, 15% to contractual services, 10.9% to “others”, 2.3% to materials and supplies and the remaining 1.7% to travel and equipment, according to ASG data.

FY 2022 BUDGET ENVIRONMENT

“It is important to note that the forecasted revenue for FY 2022 is predicted on the continuing maintenance of StarKist’s current operation and employment levels,” the governor said.

He also says that despite the uncertainty and risks associated with the minimum wage, federal 30(A) tax credit, and environmental enforcement, “there is confidence the demand from existing production contracts and niche markets will provide stability.” Additionally the guest workers program in place helps meet needed capacity at StarKist Samoa.

“Massive monetary injections into the economy consequential to the amount of aid from the federal government also impacted FY 2022 revenue forecast,” he said adding that current revenue collections remain steady together with an aggressive stance from the collection division to provide better enforcement.

BUDGET FORMAT

According to the governor, the spending budget document for FY 2022 is based on the projection of revenue data posted by ASG Treasury’s Revenue Division. If during the fiscal year, the revenue capacity of ASG increases or decreases, a supplemental financial plan shall be prepared and transmitted to the Legislature for its consideration.

For the semi-autonomous agencies, the governor said each entity will continue to submit the details of their respective budgets directly to the Fono separately from budgets of the general government.

He said authorities will present details of their FY 2022 budget to the Fono and are to provide a copy of their budget submission to the ASG Budget Office. “This process will highlight the budgets of each authority for better scrutiny and review,” he pointed out.

Samoa News notes that in the past three fiscal years, the authorities have submitted their own budgets with details directly to the Fono.

BUDGET IDEOLOGY

The FY 2022 financial plan “seeks to finance government activities in fiscal year 2022 aligned with improving healthcare, education, economic and infrastructure development; aimed to boost our local economy for job growth,” the governor said.

“It also has the funding for minimum wage increases, increases for degree holders for both teachers and non-teachers, and the new classification plan for the American Samoa Government,” he said. “In essence, it will foster the allocation of financial resources to various sectors of government.”

Overall, he said the financial plan continues to place emphasis on expanding the economy of American Samoa and sustaining “our public service priorities while achieving a balance budget”.

“In essence, he said that while a budget is approved, spending will be based on the actual collection of revenues. “Simply, we can’t spent money we don’t have and will do whatever is necessary to ensure compliance,” he points out.

Samoa News will report in tomorrow’s edition on certain specific issues addressed by the governor and the response from the Senate President Tuaolo Manaia Fruean.