Through the Association of Municipalities of Ecuador (AME), several of the country’s mayors have expressed anger and concern over a ministerial agreement by the Ministry of Finance that reduces the budget allocations municipalities will receive in the second four-month period of this year.

The reduction of funds will be 5.46 percent and will affect 221 cantons, the authorities protested. The reduction will take place at a time when the cantonal decentralized autonomous governments (GAD) must face the ravages of a harsh winter and must prepare for the arrival of the El Niño phenomenon, asked Patricio Maldonado, mayor of Nabón (Azuay) and head of the AME.

“Mayors are responsible for solving the problems of education, health and infrastructure. But resources are what limit us, and we are here today precisely because of this great concern at the national level. We are witnessing this decline, which is why we are raising our voices and asking the Government to listen to the municipal community and that decisions are made jointly, as it should be,” Maldonado emphasized.

Joffre Quintero, the mayor of Río Verde, one of the flood-affected cantons in Esmeraldas, said that “what is happening is unbelievable,” as the municipalities are dealing with several problems that have affected them.

He indicated that in a meeting held on Saturday with President Guillermo Lasso, he was asked not to cut funds, “because the small municipalities of Esmeraldas, the municipalities that are now affected, are greatly reducing our resources.”

The president was asked to create conditions for prompt approval of projects and direct grants to deal with emergencies.

“There are whole families who have lost their homes. There are entire families who have lost everything and who have no possibility of recovery because there is no source of work, no income. These are humble families who have no chance to rise up,” said Quintero, who demanded the presence of the state in the affected areas.

AME assures that the ministerial agreement was not socialized. In addition, the union asked the Ministry of Finance to clarify the formulas for reducing allocations, the form of distribution and the calculation of values ​​determined in “Tranche B” of the Territorial Equality Model.

The Ministry of Economy and Finance issued a statement to clarify the “inaccuracies”, in response to the mayor’s statement.

The state portfolio indicated that the funds are distributed according to the actual received income to the general state budget (GSP).

He explained that the Organic Code of Territorial Organization, Autonomy and Decentralization (Cootad) establishes that GADs are participants in 21% of permanent income and 10% of non-permanent income (oil) of PGE; while the Organic Code of Planning and Public Finance (Coplafip) mandates that allocations be reviewed every four months to be consistent with effective revenue.

Finance specified that the state budget in the first quarter of this year had less permanent revenues (taxes) and non-permanent revenues (oil revenues). “For this reason, the calculation of allocations for GADs by the method of territorial equality (MET) for the second four-month period of the year has a reduction of 5.6%.”

In this sense, the ministry noted that “the state cannot deliver funds that do not exist”, since according to the law, PG funds are distributed according to the generated income.

Additionally, it indicated that Government allocations for GADs increased by 14% ($387 million).