APPENDIX I
Mr.
Frank C.
11/11/84
APPENDIX I
Conahan
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that in general American Samoa received in excess of 90% of its revenue
support from federal sources.
The result is derived by categorizing
local excise and income taxes as "federal".
This is misleading to
the reader in several ways.
First, it presupposes that if these taxes
were collected and retained by the federal government, we would not
impose alternative territorial taxes, such as sales taxes, gross
receipts
or other income taxes, or tangible property taxes.
Secondly,
the figures used do not take into account American Samoa's revenue
from the various enterprise activities operated by the territorial
government.
When the total generated revenue is presented with the inclusion of
the enterprise activities the degree of average federal participation
drops from over 90% to 70% {see Appendix A).
If the use of the
questionable tax revenue sources are removed from the analysis, not
added to the American Samoa tally, but simply eliminated from the
comparison,
the federal rate drops still further to 61%.
A reasonable
case can be made that in the absence of the listed tax sources,
American Samoa would generate a revenue amount at least equal to half
the lost federal yields.
In this case the actual federal fiscal
participation in American Samoa would be only 53%.
This figure is not
significantly out of line with present levels of federal participation
with some states.
This near parity would be achieved without programs
such as revenue sharing and others for which American Samoa is not
eligible.
Last,
I would offer comments and suggestions on several specific areas
1.
Federal organization.
The history of the insular territories
especially since 1950, demonstrates rather emphatically, in my view,
that any federal agency administering U.S. policy on those territories
does not function effectively within a major department or other
large agency of the U.S. Government.
This statement is not intended
to be critical of any Secretary of the Interior, present or past,
or the head or staff of any territorial organization within the
Department of the Interior.
Most, if not all, Secretaries have
responded postively to their territorial responsibilities.
Their territorial organization staffs have been sensitive generally
to territorial concerns and have included many dedicated persons.
The present staff deserves specialnote in this regard.
The program
is simply too small to warrant prolonged attention of higher
authority in this setting.
,
Accordingly, it is my strong opinion that U.S. territorial policy
requires and deserves administration either by a special organizaton
within the Office of the President or by a newly established separate
agency, serving in both cases, no other purpose.
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Equally required,