ASG General Fund revenue does not meet projections in 2nd quarter

Pago Pago, AMERICAN SAMOA — When the Senate held a hearing to examine the status of government payouts on Wednesday, March 19, 2025, queries about the government’s finances were also made. In particular, whether the government would be able to meet its budget projections by the end of the FY 2025.

The answer from ASG Treasurer Donald Kruse and the Deputy Director of the Budget Office Aukso Satia at the time, seemed to be yes, as they pointed to the collections being better and the 10% cost containment in the Executive Branch helping. Without the 2nd quarter done, Kruse offered some general numbers saying, January and February preliminary/ unaudited numbers are good.

However, with the Financial Report as of October 01, 2024 to March 31, 2025 out, it shows a different story.

Despite showing that its revenues exceeded its expenditures by $2.7 million, the ASG General Fund revenue collections for the second quarter of fiscal year 2025 are significantly short of budget expectations. Data for the period ending March 31 show that actual collections stood at $68.8 million — about $14.1 million below the year-to-date projection (budget projected amount is $83, 991 million).

The gap marks the second consecutive year that the General Fund has missed its midyear revenue target.

In fiscal year 2024, the shortfall was approximately $4.2 million. By contrast, fiscal year 2023 saw a stronger performance, with midyear collections reaching $74.1 million — roughly $15.7 million over budget at the time.

The change trending from surplus to deficit has developed over three years, as several of the government’s primary revenue streams have either flattened or declined.

It should be noted that in passing the FY2025 budget last year, the Senate had discussed their concerns about the budget not being based on realistic numbers, especially considering the end of the cycle of COVID funding. However, the Lemanu administration insisted that the budget figures were doable and the Fono gave in.

Among the revenue sources that missed their FY2025 targets, the most significant was General Excise Tax. This category, which typically provides a large share of General Fund revenue, brought in $10.8 million by the end of the second quarter — falling $5.0 million below budget.

Individual Income Tax collections, which peaked in FY2024 at $26.1 million, decreased to $22.1 million in FY2025. This year’s midyear figure is $2.6 million below budget. The decrease coincides with reductions in government payroll, overtime, and federally supported temporary hiring programs, which had previously boosted withholding taxes. (This would correspond with ASG’s 10% cost containment and the current federal moves to cut government spending.)

Corporate Income Tax revenue in FY2025 came in at $17.1 million. While this represents a recovery from FY2024’s $11.1 million, it remains $2.0 million below the FY2025 projection. The rebound suggests that some business sectors have regained footing, but not at the level anticipated in the original budget plan.

(During the hearing, Treasurer Kruse was asked about any measures the ASG has planned to raise revenues, to which he replied that they are currently depending on enforcement, pointing to taxes being high as it were.)

In addition to tax under collections, several non-tax revenue sources are also underperforming. Fees and Fines collected through the second quarter totaled $2.67 million — down from $3.2 million in FY2023 and $3.01 million in FY2024. The current year’s amount is $281,000 below the midyear budget.

Port Administration Charges — collected from import activity and shipping services — generated $1.83 million through March. This represents a modest increase over the FY2024 midyear figure of $1.67 million but still comes in $196,000 short of the FY2025 projection. The category had reached $2.24 million at midyear in FY2023.

Military Cover Over payments, which represent a federal transfer related to military spending, have remained modest. In FY2023, the category produced $332,000 — slightly above its projection. No collections were recorded in FY2024. In FY2025, it rebounded to $307,000, nearly matching expectations.

One of the most notable trends over the three-year period is the decline in Transfers In — internal reprogrammed funds or general support from other accounts, such as the reallocation of ARPA and other federal funds. It shrank by more than 56% over three years. Transfers reached $12.4 million by the second quarter of FY2023 but declined to $7.5 million in FY2024 and further to $5.4 million in FY2025. This year’s figure is $1.4 million below budget and marks the lowest midyear amount over the three-year span.

While the General Fund’s total revenue figures have stayed within a narrow range — between $67.3 million and $74.1 million at midyear over the past three years — the internal composition of that revenue has shifted.

In FY2023, most major categories either met or exceeded their budgeted targets. Surpluses in Corporate Tax, Individual Tax, and Transfers In combined to produce a midyear cushion. That year’s strong performance reflected a combination of federal support, late tax settlements, and the momentum of post- pandemic economic recovery.

By FY2024, revenues began to go in a different direction from projections. Although Individual Taxes remained high, other categories began to slip, particularly Transfers and Excise Taxes. That year ended the second quarter with a $2.4 million shortfall.

In FY2025, the difference widened. General Excise, Individual Income, Corporate Income, and Transfers In all missed their respective targets. Fees, Fines, and Port Charges also underperformed.

The result is a $10.4 million gap between actual and projected revenue — nearly four times the size of the FY2024 midyear shortfall.

Across the three fiscal years, several patterns have emerged. Revenue streams tied to economic activity — such as consumption, trade, and wages — have become more volatile. Sources that once helped balance shortfalls, like Transfers In, have declined in availability and impact.

This year’s underperformance also reflects a shift in timing and economic behavior.

In the absence of temporary federal hiring and pandemic-era support, tax collections now reflect a smaller and more stable economic base. Consumption-based revenues, like excise taxes, appear to be leveling off. Business income, while recovering, has not yet returned to the levels that drove the FY2023 surplus.

(Source: 2025 ASG 2nd Qtr Unaudited Revenue Report)