07 February 2011

American Samoa Government Cuts Workers' Hours

Gov. Togiola hopes to save $3 million

PAGO PAGO, American Samoa – American Samoa’s Governor, Togiola Tulafono is implementing a reduction in work hours plan for all American Samoa Government (ASG) employees paid for by local revenue and it goes into effect this weekend. This is a move praised by Senate Galeai Tu'ufuli, who has insisted that tough decisions should be made to reduce the ASG payroll and assist the government with its financial woes instead of imposing new taxes on residents.

A reduction in working hours, which is expected to save some US$3 million in local revenue, is for employees of the Executive Branch only. It includes all directors, the lieutenant governor and the governor, said Dr. Jacinta Galeai, the communications director for the Governor's Office, when asked yesterday afternoon for confirmation. It was not immediately clear in the document breaking down the reductions, what the US$3 million savings references per payroll, per month, or for the total year 2011.

It should be noted that last month during testimony before the Senate Budget and Appropriations Committee, ASG Treasurer Magalei Logovi'i gave a one page summary report to the panel of what he later described as the ‘fixed payments' the local government has to pay monthly. In the summary was a monthly figure of "US$5.44 million for payroll local only and based on 2010 expenses."

The furloughs were first announced during a cabinet meeting yesterday morning, which was followed in the afternoon by the governor's memorandum titled "Reduction in Hours for ASG Employees." The memo included a note to cabinet members, saying that as the governor stated during the cabinet meeting, unless otherwise directed, this reduction in hours will be effective beginning Feb. 6.

To be clear, said the Governor, the reduction in hours does not apply to:

- Grant funded employees
- Two year contract specialists
- Grant portion of grant and locally funded employees
- School-level employees of the Department of Education, specifically those that are physically located at the school sites, inclusive of bus drivers and on-site school lunch staffs that are funded with local funds; [and] locally paid bathroom monitors.

"The hour reductions are configured in an effort to target the reduction in a way to minimize the impact on the lowest earners," he said. According to the data provided to the directors, the reduction depends on the employee's salaries. It says that employees paid below US$10,400 annually up to US$20,800 will get four hours deducted every pay period. The number of affected employees in this category is 1,788.

For employees paid US$20,800 to US$49,999 there will be a reduction of 6 hours per pay period affecting 728 workers; those paid US$50,000 to US$62,400 will have 8 hours deducted, affecting 36 employees; and there are 31 employees paid above US$62,400 and they will get 12 hours reduction.

In total, 2,583 government employees will be affected, according to the Government data.

Togiola said each director and agency head is responsible for scheduling their staff in order to assure the continuation of services to the public. He also said that cabinet members are responsible for ensuring that the hour reduction plan is carried out as smoothly as possible.

At least three government officials told Samoa News yesterday afternoon that they hope the Fono leadership will do the same when it comes to employees of the Fono, especially since lawmakers are only in session for 90-days out of the year.

"There are so many Fono employees and what do they do when the Fono is not in session? I have also been in the Fono a couple of times during hearings and witnessed at least four to five Fono employees sitting in the gallery watching the proceedings," one official said in an e-mail message. "If the Fono is really concerned with the financial shortfall their employees should also get a reduction in hours, since their pay is all locally funded," said the second official. Both officials asked not to be identified.

Togiola had already stated publicly that he hopes the Fono will follow suit when the executive branch does implement a reduction duriing working hours.

"I congratulate the Governor for doing the right thing. This is the smartest thing he has done so far, declared Sen. Galeai Tu'ufuli, after learning about the reduction in hours. This move should have been carried out from the beginning when the administration knew there was a problem with revenue collection."

Galeai said, a testimony received by the Senate showed a US$7.2 million shortfall which was also the Governor's statement to the Fono and then on Wednesday, new information surfaced with the estimated shortfall climbing to US$12 million, which was revealed during a House committee hearing on Wednesday.

"At this point, we don't have the accurate information in terms of the government deficit, whether it is US$7.2 million or US$12 million, he said. But this new cost saving measure by the Governor, in reducing hours, is a very, very wise move. The Governor might not like my comments but a leader has to do the right thing and make those tough decisions," said the Manu'a lawmaker, who insisted during hearings on the administration's proposed revenues measures that the public should not be burdened with new taxes.

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