The Star (Kenya)
Senate leaders back disputed proposal
Senators are likely to approve the House Finance and Budget committee’s proposal on the third basis of revenue sharing among the 47 counties when they assemble on Tuesday.
This follows the endorsement of the proposal by the Senate leadership comprising allies of President Uhuru Kenyatta and ODM boss Raila Odinga.
The proposal has been at the centre of a protracted dispute among the lawmakers. “The formula proposed by the Senate Finance committee be adopted as the new basis for allocating revenue to counties,” a policy brief seen by the Star reads.
The brief was handed to the House leadership led by Speaker Kenneth Lusaka and will likely inform the debate and vote when the House convenes. It recommends that the formula be implemented in a phased manner to avoid disrupting county plans and budgets and recommends a two-year moratorium.
The Finance committee formula has been at the core of a standoff as it cuts allocations to 18 less populous counties by Sh17 billion.
It provides for a 10-parameter formula, with the biggest weight placed on health (20 per cent) and basic share (also 20 per cent), population (16 per cent) and agriculture (12 per cent).
In a bid to ensure that revenue losses are minimised, the brief states that if the proposal is adopted, no county should lose more than 10 per cent its previous allocations.
“Counties whose revenues are bound to reduce as a result of the new formula should be cushioned (from Year 3) to avoid revenue shocks. A 10 per cent cushion against an agreed baseline (202021) [Sh316.5 billion] is proposed,” the leadership proposed.
If this is adopted, there will be no loser or winner as every county will get the exact allocation received in 2019-20. The committee proposes that the allocation this financial year should be based on the second generation formula and the 2009 population data.