What you need to know:
- Treasury Cabinet Secretary Henry Rotich had proposed that the 47 counties share Sh299.1 billion, up from Sh280.3 billion allocated in the previous financial year.
- The governors are banking on the Senate to live up to their mandate of safeguarding the interests of counties and oppose the Bill.
A row is brewing between county and the national governments over a proposal to slash funds meant for the devolved units in the next Budget.
Council of Governors chairman Peter Munya has criticised a move by the National Assembly to reduce the county allocations in the 2017/2018 Budget from Sh331.6 billion to Sh291 billion.
Treasury Cabinet Secretary Henry Rotich, in the Budget Policy Statement, had proposed that the 47 counties share Sh299.1 billion, up from Sh280.3 billion allocated in the previous financial year.
“The published Division of Revenue Bill denies county governments adequate resources to provide services,” Mr Munya said in reference to the Budget Policy Statement prepared by the Budget and Appropriations Committee and approved by the National Assembly.
The governors are banking on the Senate to live up to their mandate of safeguarding the interests of counties and oppose the Bill, which determines the amount of money that goes to the devolved units.
The Bill, and the County Allocation of Revenue Bill, must be passed by both Houses before being referred to the President.
Previously, the National Assembly and the Senate have engaged in a push and pull over the appropriate amount for the counties prompting the Houses to form a mediation committee to strike a compromise.
Already, signs are evident that the senators will differ with the MPs’ position, sending the Bill to mediation.
On Friday, Senate Finance Committee chair Billow Kerrow said the amount that goes to counties must be determined by the annual revenue growth.
“The MPs’ position will not fly in the Senate. We can’t slash county allocations,” Mr Kerrow told the Saturday Nation.
Mr Munya questioned the motive behind the MPs interfering with a figure that had been arrived at by Treasury and Commission on Revenue Allocation (CRA), yet these are credible institutions on financial matters.
“We are not happy at all. Treasury had given a proposal on the shareable revenue and why the National Assembly could want to change it beats logic,” Mr Munya said.
The CRA proposed that counties be allocated shareable revenue of Sh331.6 billion.
Governors have maintained that the MPs’ decision contravenes the law on revenue sharing.
Mr Munya said it was wrong to allocate funds to the National Government Constituency Development Fund before determining the equitable share between the national and county governments.
The governor said inadequate funding that does not match the requirements of counties would affect service delivery.
The Bill proposes that the equitable share of revenue to the counties shall be based on the second generation formula as approved by Parliament last year, using seven parameters that have not been approved by the Senate.
“...the second generation sharing formula is yet to be approved by the Senate, which is the approving House,” he said.