The joint Budget ad Appropriations Committee got the chance to ask the Governor’s Executive Advisor for Finance, Brett Butler, about the local revenue projections in the proposed Fiscal Year 2027 budget for ASG Monday.
The local revenue portion of the budget plan totals $137.8 million. This compares to $141.2 million in the approved Fiscal Year 2026 budget and $165.9 million in the approved FY 2025 budget for ASG..
Butler informed lawmakers that in compiling the local revenue numbers, they looked at actual revenues that were collected in FY2021 up to FY2026 to date. He said the actual revenues that were collected do not come close to the budgeted revenues.
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All revenue sources in the FY2027 budget are lower than the approved FY2026 amounts. Corporate taxes for example are listed at $25.4 million, down from $31.3 million in FY2026, Individual Income Taxes drop from $45.1 million in FY2026 to $35.2 million and excise taxes drop from $23.5 million in FY2026 to $22.8 million.
House Speaker Savali Talavou Ale was of the opinion that the drop in individual income taxes was because of the change in the tax filing form which he said has resulting in people not paying the 4% minimum income tax.
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However Butler said the change in the form was for federal taxes like the Additional Child Tax Credit and earned income Credit. He said the 4% minimum tax was still being collected. However House Speaker Savali insisted that the amended tax filing form was the reason why individual income taxes have dropped.
Senate President Tuaolo Manaia Fruean queried whether the Transfers In listed at $13.7 million included the $10 million of ARPA interest that’s been invested. Here’s Butler’s response.
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Butler said the 4% minimum tax is worth about $20 million a year. And the amendment to the tax form was recommended by the Tax Office Senator Togiola Tulafono said he has heard that in many cases taxpayers have been refunded all of their taxes and are not paying the 4% minimum tax.
Acting Treasurer Carri-Lee Magalei Tulafono said she would need to check with the Tax Office on this issue.
