Wednesday, November 12, 2008 Editorial: The imbalanced budget
CAGAYAN de Oro's budget next year is neither tight nor true: the gargantuan budget for the economic services sector is bloated with money for losing government enterprises and onerous subsidies, including long-term debts that mostly funded neither cost-effective nor demand-driven infrastructure projects.
The P1.4 billion budget unveiled by the Jaraula administration is the remotest thing from a fiscally sound document. In the face of a looming P300 million budget, it is still permeated with wasteful spending and other fiscally unsound practices.
A careful examination of the budget reveals a spending-based growth regime that prioritizes the bailout of non-performing enterprises-passenger terminals and markets attached to them, land expropriations for infra-projects that have long been completed, and the bail out of two formerly publicly-owned markets whose hybrid BOT contracts are guzzling up the city's coffers and killing the vendors with high rental rates.
In 2009, the city will have spent over P200 million for the subsidies alone, which state auditors consider onerous because both markets are under Build Operate and Transfer (BOT) scheme.
Because the BOT contracts for these formerly public enterprises require an 80-20 share for the revenue of the markets based on projected income and not on actual profits, the city is forced to cough up subsidies to keep its contractual obligations.
This year, the allocated subsidy for these two markets-including the operations and personnel component-is set at around P90 million. In the last two years, subsidies for the Cogon market alone have already totaled over P161 million.
On the contrary, spending for social security, services, and the welfare sector is seeing significant cuts, while allocations for health, nutrition, and population control has remain steady for the last three years at 12 percent.
Earmarks for the social services sector, a mandated budget component intended to fund programs for indigents and marginalized groups, went down to 11 percent from 14 percent in 2007.
Local government agencies such as the City Veterinary Office (CVO), meanwhile, are getting minuscule increases that apparently are not commensurate to the task they are performing.
A striking case in point is the outbreak of suspected hog cholera in Cagayan de Oro, which leaves the CVO short of funds for vaccines to counter the disease.
This year, CVO is allotted only P3 million for its programs-livestock livelihood, vaccinations, animal infrastructure-with the bulk of its P14 million allocated budget going to the wages of its personnel.
One department head the budget hearing last week dismayed.
"Useless ni nga budget hearing," a Sun.Star reporter overheard her saying.
True, indeed.
But budget hearings, however, are not as useless as they may seem-whether in Congress or town councils-for they offer a quick look at government's fiscal goals and priorities, or the lack of both.
