P500M shortfall in collection of taxes delays city projects

Lack of city funds has delayed the implementation of city projects under the Annual Investment Plan as the targeted tax collection last year fell short by P500 million.

It is for this reason that the Cebu City council invited acting city treasurer Tessie Camarillo during its regular session last Wednesday afternoon.

Each of the city councilor supposedly has a P10-million pork barrel to be taken from the local development fund. This is to be used for the projects to be implemented in their respective districts.

Yet it appears that there are projects they had endorsed and included in the 2005 Annual Investment Plan which were approved by the local development council and adopted by the city council, that are not going to be implemented this year for lack of funds.

Presentations made by Camarillo together with Emma Compra showed that the delay has primarily something to do with the P500-million shortfall in the targeted tax collection last year.

While the appropriated budget for the projects included in the 2004 AIP amounted to P265.46 million, the actual funds only reached P137.51 million.

The sources of funds for the 2004 AIP supposedly include the P127.95 million from the city's general fund to complement with the mandatory 20 percent budget coming from the city's Internal Revenue Allotment share or equivalent to P121.64 million and the P15.86 million savings from continuing appropriations. Savings from continuing appropriations are outstanding funds for projects included in the previous AIPs that have not been implemented.

Yet because the city treasurer's office fell short on its target collection by P500 million, the P127-million subsidy from the city's general fund was not realized.

As of the end of last year, only P38.1 million of the P79.6 million appropriations for Maintenance and Other operating Expenses as well as P30.9 million of the P185.6 million budget for projects charged under the capital outlay were implemented, resulting to an obligation balance of P154 million worth of projects that are yet to be implemented.

Thinking that there are still remaining funds of P154 million, some members of the city council, especially councilor Gerardo Carillo, asked if it could be used for the projects in his district.

Yet of the amount, only P27 million is left because the P127-million allocation from the general funds was not realized.

And even if there will be surplus of funds from the LDF, councilor Jocelyn Pesquera of the council's committee on budget and finance said they could not use it for other projects because they need around P60 million for the renovation of the old City Hall building slated to be up for public bidding on October this year.

A separate allocation of P26 million in 2003 AIP and another P40 million in the 2004 AIP were budgeted for this purpose under the capital outlay.

Appropriations under the capital outlay could not be closed at the end of the year and thus become continuing funding appropriations for the succeeding years, which is unlike the MOOE appropriations. - Cristina C. Birondo