Rama vetoes 2024 annual budget, but Council overrides

Cebu City Mayor Michael “Mike” Rama
Cebu City Mayor Michael “Mike” Rama(File photo)

CEBU City Mayor Michael Rama vetoed several items of the City Council-approved 2024 annual budget, saying the legislative body should not go beyond its oversight functions.

The mayor said the items were “prejudicial to the public welfare.”

However, the council overrode the mayor’s vetoes.

City Councilor Jocelyn Pesquera, vice chairperson of the budget and finance committee and co-author of the 2024 annual budget ordinance, said the same provisions were embodied in the 2023 annual budget amounting to P50 billion, yet these were sustained.

The council first approved on Dec. 20, 2023 the 2024 annual budget of P19,998,463,532.30 for general funds and P2,095,399,689.40 for special accounts.

This was later amended on Dec. 27, adding almost P4 billion, increasing it to P25,833,177,745.20.

One of the items Rama vetoed was the defunding of unutilized capital outlay, which he said contravenes several statutes.

He said the provision set on the ordinance violates Section 322 of Republic Act 7160, or the Reversion of Unexpended Balances of Appropriations, Continuing Appropriations, as well as Section 306 (d), and Sections 24 and 25 of the Government Accounting Manual for Local Government Units (LGUs) Volume 1.

Section 306 (d) defines capital outlays as appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the LGU concerned, including investments in public utilities such as public markets and slaughterhouses.

Section 322 states that “unexpended balances of appropriations authorized in the annual appropriations ordinance shall revert to the unappropriated surplus of the general fund at the end of the fiscal year and shall not thereafter be available for the expenditure except by subsequent enactment. However, appropriations for capital outlays shall continue and remain valid until fully spent, reverted or the project is completed. Reversions of continuing appropriations shall not be allowed unless obligations therefor have been fully paid or otherwise settled.”

Section 24 of Government Accounting Manual for LGUs Volume 1, meanwhile, stipulates that at the end of the year, unreleased appropriations for capital outlays shall be recognized as continuing appropriations; while Section 25 of the same manual states that at the end of the year, unobligated allotments for capital outlays shall be recognized as continuing allotments.

Rama said the position was confirmed by the Department of Budget and Management in its communication dated Dec. 29, 2023, stating “based on the foregoing, we are constrained to apply the provisions of the law as they are clear. Appropriations for capital outlays shall continue and remain valid until fully spent, reverted, or the project is completed.”

“Thus, as local chief executive and lawyer, consistent with my duty to uphold the law, I hereby veto this section for being ultra vires as it is in contravention of statute,” Rama said.

Rama, in his letter, said the budget execution, including the various operational aspects of budgeting, evaluation of work and financial plans for individual activities, regulation and release of funds, and other related activities that comprise the budget execution cycle, is to be “exercised exclusively” by the executive department.

“I respectfully register my veto to the foregoing sections which provide special conditions to the sourcing and release of funds for being post-enactment measures which are beyond the oversight function of the Sangguniang Panlungsod,” he said in his letter.

Rama said setting requirements to the sourcing and releasing of funds is an exercise of a legislative veto, which is beyond the department’s authority.

He said such action, if not curtailed, encroaches on his executive prerogative.

He also said any law that empowers the legislative department or any of its members to play any role in the implementation or enforcement of appropriation law is considered “invalid.”

“From the moment the law becomes effective, the legislature’s law-making role necessarily comes to an end and from there the executive’s role of implementing the budget begins. So as not to blur the constitutional and statutory boundaries between them, the council must not concern itself with details for implementation by the executive,” said Rama.

Rama, in the closing portion of his letter, assured Cebu City residents that the 2024 budget will be implemented “in a timely and transparent manner.”

City Councilor James Anthony Cuenco, a member of the committee on budget and finance, moved to override Rama’s vetoes, which was seconded by Councilors Renato Osmeña Jr. and Nestor Archival. The council unanimously approved it during its regular session on Wednesday, Jan. 17.

“The lined item vetoes the same provisions which are the safety nets we have put in place in order to safeguard the funds of the City,” said Cuenco.

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