FY2023 budget capped at $693.41 million yet to be introduced in fono

Pago Pago, AMERICAN SAMOA — The American Samoa Government’s proposed budget for the new financial year, starting October 1 2022, is capped at $693.41 million with $84.54 million allocated for salaries.

The proposed budget has increased over the previous financial year’s $552.78 million budget — by 25 percent.

This is outlined in the Governor Lemanu Peleti Mauga’s executive summary of the new proposed fiscal year 2023 budget.

Addressed to Senate President Tuaolo Manaia Fruean and Speaker of the House Savali Talavou Ale, the governor said as they navigate through the current COVID-19 environment, the island have been weathered and tested, and through the process the government has become more resilient.

“With due gratitude these are incredible times as we continue to harvest the massive inflow of federal aid due to the pandemic, that provided funding for several critical projects to better our community.

“With certainty, the activities created from this influx of aid has provided stability to our revenue collection and further sustained our economy despite global market risks and chaos. Increase in Government wages and federal aid has helped ease some of the burden on families as a result of the increase in the cost of living.”

Lemanu said the rise in interest rates has resulted in an increase in the cost of borrowing and the purchase of essentials to meet basic needs and that this may likely result in an economic down turn.

“There is continued talk of a recession within the global market and by all means we are not immune but connected as our economy is mostly depended on imported goods from abroad.”

He said there are four main funding components in the budget plan that consists of federal grants, enterprise, capital movements and local funding.

The total fiscal year 2023 final budget is capped at $693,415,535 reflecting an increase if $140,630,435 or 25 percent above the fiscal year 2022 aggregate budget of $522,785.

“The total overall total increase is attributed to the significant surge in federal grants due to COVID-19.”

According to the report, local revenue to be collected is $117 million, while grants allocated is 49 % or $341 million; enterprise funding is $223 million and Capital Improvements amount to $10 million.

For expenditures, $84,543,000 is for salaries; $3.1 million for materials and supplies, while contractual services is $17 million and $891,500 for travel; $11 million allocated under “others” and $586,500 for equipment.

The Governor says risks still remain with the cannery operation such as the minimum wage increase, the tax exemption status and the shrinking fishing grounds and environmental enforcement.

“Despite the uncertainty, meeting market demand in production based on existing contracts including niche market will provide stability in operation.

“The cannery is still running at about maximum capacity with future plans to further increase production levels.”

Furthermore the Governor said the allocation of funding for increase in government wages compensation will provide economic stimulus in more income to help the community ease the burden due to the increase in the cost of meeting their basic needs.

The report says the Government anticipates collecting $77.5 million, of which $18.5 million would be from corporate taxes; $29.4 million from individual taxes and $24.6 million in excise taxes; $3 million from soda and cover taxes at $2 million.

In the meantime, the Senate has scheduled its hearing for the budget for July 25, 2022, however the budget has yet to be introduced in the Fono.