EXPLAINER: Tax increases, P50 billion budget aimed to make Cebu City Singapore-like. President Marcos Jr. told the mayor, ‘Mike, you’re ambitious.’ It’s called vision, says Castillo. With a price tag: higher taxes on real properties, business, services.

File photos
File photos

KEY POINTS. [1] The bundle of tax increases proposed by Mayor Mike Rama, for which the Cebu City Council has been holding a series of public hearings, is being pushed at the Sanggunian with two major thrusts:

a) Present rates are lower than those in other cities; the new rates are within the limits set by the law; and revision is years overdue (a failure for which, proponents say, the City has been chided by the Commission on Audit);

b) The City needs a huge amount, at least P50 billion, sought in its 2023 general budget, which will pay for the projects aimed at achieving Mayor Rama’s goal of making Cebu City “Singapore-like.”

Atty. Jerone Castillo, the mayor’s special assistant on fiscal affairs, speaking at the Sanggunian public hearing Tuesday, November 22, stressed repeatedly that the proposed increase in real estate taxes has not not gone beyond the legal ceiling. And yes, the increases are for the “transformation” of the City, the fulfillment of the “Singaporean dream.”

‘AMBITIOUS’ MAYOR. Castillo, in his pitch for tax increases, narrated that after Mayor Mike disclosed his plans for the City to President Marcos Jr., the president told him, “Mike, you’re ambitious.” In the mayor’s mind, Castillo said, was this quip – which, of course, wasn’t actually said to Marcos Jr. -- “Mangambisyon man gani sa mahjong,” referring to a term in the game, ”ambition,” which means “a special combination of tiles that receives a special payout.”

Castillo told the councilors the Singapore-like goal for Cebu City is a “dream” and a “vision.” Whatever one calls it, the project requires big money, a commodity whose price tag the mayor’s office is now showing.

TAXPAYERS’ SHARE, EQUITY. The higher taxes people living or doing business in Cebu will be paying will be their “share” in the cost of fulfilling the “dream” and contributing to the “equity.” We can’t depend on the national government alone and the pledges of private persons and entities to help, Castillo said, “we, you, I, everyone must” pitch in and help, in the same vein of Mayor Mike’s oft-repeated catchphrase, “Together we can make things happen.”

Along the same pitch, partly using it to foil the charge that the increase is unjust, Castillo said taxation alone could become oppressive and confiscatory if it doesn’t come with a program or project. The “nobie” purpose would remove or lessen the pain, he said in effect.

‘TRACTION’ FOR SINGAPORE-LIKE BLITZ. Castillo gushed over a letter from an SVD priest who said Mayor Rama’s project needed political will and financial capital. The mayor’s group sees it less as a bill of requirements than an endorsement of Oplan Singapore-like City, a “traction” of the campaign, as the mayor’s assistant puts it.

May the view of one priest be regarded as gospel truth in assessing public support? To Councilor Rey Gealon, chairman of the committee on laws, the priest’s opinion alone can’t be relied upon: one priest cannot make a public: “How about the other priests?” Yet the entire clergy in Cebu may not accurately speak for the city population.

No survey has been made on city taxpayers’ sentiment. Of course, people generally hate tax increases but the depth of opposition needs to be considered, if not actually measured. Councilor Noel Wenceslao, chairman of the committee on budget and finance, said taxpayers would show depth of their dislike only when they actually know how much more tax they have to pay.

WHO SPEAKS FOR THE PEOPLE? The city councilors technically speak for the city’s voters, as Minority Floor Leader Nestor Archival Sr. would tell his colleagues every now and then. Councilor Wenceslao said that while “most of the councilors” have expressed support for the Singapore-as-model thrust, they also are wary about the “impact,” particularly of tax increases, on the taxpayers, the people who made them Sanggunian members.

Majority Floor Leader Jocelyn Pesquera worried over a voters’ backlash if the “due diligence” made by the mayor’s group in sounding out stakeholders would turn out to be inaccurate or inadequate. The Sanggunian might be the one blamed, she said. The claimed responses differ: Castillo insisted that the business sector didn’t express opposition to the rates while Wenceslao said some business leaders told him otherwise.

‘CONSCIENCE VOTE.’ The next public hearing, set for Monday, November 28, will be the fourth before the Sanggunian en banc will vote on the tax ordinance. Meantime, the City Council will also be holding public hearings on that P50 billion 2023 general budget.

Castillo said the mayor’s office would listen to all opinions from everyone. But this is how it’s supposed to work: The councilors listen to the views at the public hearings, consider them and make their own individual studies, and then vote “according to conscience.” That is, after that “conscience vote” is forged by what each council member thinks what’s best for the city and for himself and his party, not necessarily in that order. Mayor Rama’s Partido Barug, of course, dominates the City Council.

Councilors who called for a slowdown (“hinayhinay lang”) cited the impact of a pile-up of increases unloaded at one time on the taxpayer. Councilor Mary Ann de los Santos and Councilor Gealon in effect said the manner of effecting the increases at one time, which the City should’ve staggered over a period of years as willed by the law, would make it oppressive and confiscatory. Councilor Wenceslao told Castillo that “most councilors” worry over how their constituents would take the planned huge increases.

FINAL SHAPE OF THE ORDINANCE. In the next few days, there may be groundswell of opinion about the proposed increase of taxes and fees -- from the business people, landowners and others affected by the omnibus ordinance -- once most taxpayers would know the kind of blow each would get in the gut.

That may also tell how much political capital Mayor Rama would be willing to spend in his mission and, of course, the final shape of the omnibus ordinance, which is advertised as the chance for citizens to pay their share of the cost in catching the Singaporean dream.


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