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Congressman explains $15 million request to offset wage hikes
Thursday,
May 1, 2008
Congressman Faleomavaega is seeking $15 million from the federal government to help employees who will lose their jobs in the event that the local minimum wage increases another 50 cents later this month.
But he says congressional leaders may not see a need for the funding since the owners of Star Kist Samoa have stated that they are seeking more tax incentives from the American Samoa Government. Faleomavaega said on his weekly radio program yesterday that $30 million has been requested $15 million for American Samoa and $15 million for the Northern Mariana. He said if the next 50-cent increase cannot be stopped, the funding would help employees who are displaced from their jobs. He said the assistance is intended for all workers whose income will be affected particularly cannery workers. The congressman added however that an announcement by the owners of Star Kist Samoa, Delmonte that it is seeking a new tax structure from ASG might affect how Congress will act on the request.
He said the cannery may opt not to lay off employees if it receives added tax incentives from the local government and this may lead congress to believe that the assistance he’s seeking is not necessary. KHJ News has not received a response from Delmonte regarding the new tax proposal and this was not covered in a statement form the company’s corporate communications manager Mary Sestric earlier this week about planned changes to offset increased labor costs. The Marianas Variety newspaper reported however that Star-Kist is proposing a new state tax structure, which the company said, reflects the tax scale already provided to others doing business in American Samoa, as well as the deteriorating economy.
It quoted Star Kist saying that under current conditions, the company can only agree to a required tonnage of 238 tons per day and 1,485 employees. This is a reduction from the 450 tons per day and 2,520 employees provided in the expiring agreement between Star-Kist and the American Samoa Government. Star-Kist added that it cannot agree to any further capital investments as part of the tax structure. The company said that the proposed tax agreement does not guarantee the cannery will continue operations and sustain employment at current levels. Congressman Faleomavaega said there’s nothing wrong with having the cannery negotiate a new tax deal with the local government, as there’s no certainty what is being requested from Congress will be granted.
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