10 Jan 2011

Togiola blames ASG financial woes on hiked minimum wage

11:40 am on 10 January 2011

The American Samoa Governor has blamed events like the increased minimum wage and decreased spending for the government's revenue shortfall.

Governor Togiola Tulafono is now expected to announce further austerity measures during his speech at the opening of the 32nd Legislature.

There is already a freeze on hiring new staff and only essential off-island travel is being approved.

Our correspondent Monica Miller said the Governor outlined causes for the revenue shortfall on his weekend radio show.

"The cost has gone up because of the minimum wage and as a result they're bringing in less goods which means that there's less revenues that the government can collect from excise taxes. People are not buying as much and so this is also contributing to revenue for the business community, as a result they are not paying as much in corporate taxes and so that combination has resulted in the revenue shorfall."

Monica Miller says the Governor also said there has been delays to getting federal grants to cover expenses but stopped short of mentioning whether any government overspending is also to blame.