Senators reject revenue sharing deal

A partial national and county government shutdown looms large after the Senate refused to budge in its demand that more cash be allocated to counties in the Division of Revenue Bill 2015.

Backing the Senate is the Council of Governors, which put out a tough statement yesterday in the national dailies, supporting the extra Sh7.7 billion that would raise the total allocation to counties to Sh291 billion from the Sh284 billion initially approved by the National Assembly.

The CoG statement was signed by Bomet Governor Isaac Ruto, the council's outgoing chairman. Members of the Senate Finance Committee termed the deal brokered by the Intergovernmental Budget and Economic Council (IBEC) under Deputy President William Ruto as null and void because they were not involved in the negotiations.

This is unlikely to satisfy President Uhuru Kenyatta who, The Standard has learned, has demanded an explanation for the Senate's and CoG's opposition to the negotiated deal brokered by his deputy in the presence of governors, Treasury and MPs.

But the CoG also disowned the IBEC deal reiterating "their support to the Senate's proposal on the 2015-16 Division of Revenue between the two levels of government."

"The mediation committee (between the Senate and the National Assembly) is meeting again today (yesterday) to deliberate on the matter and our position remains the same, more funds to counties. If the members fail to agree, we will go back to the drawing board (Budget making process)," said the chairman Mandera Senator Billow Kerrow.

"The funds to counties are not enough. We must unlock this stalemate because in case of any further delay, the operations of county governments will grind to a halt. It should not go beyond the end of June," added Kerrow.

The governors have termed the Sh283.7 billion approved by the National Assembly, an equitable share of Sh258 billion, and conditional allocations amounting to Sh25.7 billion as "short of the Council of Governors position of 45 per cent allocation of the last audited revenue accounts."

"By using the council's proposal, county governments would have collectively been allocated Sh349 billion for the 2015-2016 financial year," CoG said in its statement in the local dailies yesterday.

Governors want the Government to reallocate the budgets of state corporations that are "believed to account for not less than Sh40 billion in government expenditure."

Yesterday, the Senate warned of a Government shutdown if the mediation committee fails to reach consensus on the bill, which guides division of national revenue between national and the 47 county governments.

Speaking in Naivasha on the sidelines of a consultative meeting on the Public Sector Remuneration and Benefits Policy with the Salaries and Remuneration Commission (SRC), the senators vowed not to relent in their push to ensure counties receive adequate resources.

Under the disputed proposals, the national government will retain Sh976.9 billion out of total shareable revenue of Sh1.2 trillion. Last year, counties received Sh226 billion and Sh1.87 billion for Level Five hospitals.

Senators Kerrow, Mutula Kilonzo Junior (Makueni), Wilfred Machage (Migori), Wilfred Lesan (Bomet) and Catherine Mukiite (nominated) attacked the National Assembly's position and wondered who the President consulted on the matter.

"Why should the President be upset? The IBEC agreement, without the Senate involvement, and having not been canvassed on the floor of the House, remains a mere agreement," said Kilonzo Jnr.