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No funding formula until local government elections

Opposition Members of Parliament (MPs) are demanding that government allocate the 2015 subventions to Guyana’s 65 Neighbourhood Democratic Councils (NDCs) and 6 Municipalities in accordance with the Fiscal Transfer Act which was passed and assented to in 2013.

Communities Minister, Ronald Bulkan, however, is suggesting that the formula will be employed after the holding of local government elections.

As the Committee of Supply of the National Assembly considered allocations for the Ministry of Communities on Tuesday, Communities Minister, Ronald Bulkan, shared that $260 million has been allocated among the 65 NDCs while $ 99 million is to be split among the 6 municipal offices, of which the Georgetown municipality will be receiving the largest portion – $24 million.

These allocations came in for stiff scrutiny, however, when Bulkan disclosed that they were not arrived at through the employment of the formula outlined in the Fiscal Transfers Act. The formula was proposed by local government specialist Vincent Alexander during consultations, and the bill was passed unanimously in 2013.

Proposed by the Peoples Progressive Party Civic (PPPC) Opposition on why the formula was not used to determine the amounts to be allocated Bulkan said that the “system of local government is broken and the capacity of Councils is degraded.” He further said that the local organs “have been damaged and rendered dysfunctional…”

He sought to assure the Committee of Supply that “once the democratic renewal has taken place…only then the process of rebuilding the capacity will take place,” suggesting in uncertain terms that the formula will be utalised after the holding of local government elections.

Opposition Whip Gail Teixeira wasted no time is taking Bulkan to task for this decision. “Why has it not been applied in the 2015 Budget…” she demanded.

“The honorable member cannot be capricious with the law…we are demanding that the minister implement the Fiscal Transfer Act with the formula that we agreed to…that is law,” Teixeira lectured.

Aiming at Bulkan’s comment about applying the formula after a “democratic renewal,” Teixeira said “he cannot wait until 2016 or 2017 or God knows whenever.” Former Permanent Secretary of the now reformed Ministry of Local Government weighed in by pointing out that the state of the local government organs is not a consideration for the implementation of the formula and too called on government to implement the formula immediately.

In accordance with the formula, NDCs and municipalities are to have their subventions determined based on their population size, geography and the rate of collection of rates and taxes. 30 percent of the subvention is to be determined by population size while another 30 percent is to be determined by the geography in which the organ falls. 40 percent is dependent on the rate of collection of rates and taxes.

This formula does not apply to the Georgetown municipality, however, because of its particularly large geography and population. Applying this formula to the Georgetown municipality would put it at a disadvantage.