State walks back proposed tax increases

The State of Baja California has decided to walk back its proposal to increase taxes for next year in order to raise additional funds to address the financial crisis.

Gov. Francisco Vega announced the decision during a meeting held Wednesday with businessmen.

The state executive called upon business leaders to create a committee to seek options to address the issue.

Secretary of Planning and Finances Bladimiro Hernández introduced a budget proposal that included an increase in payroll taxes and the creation of new education and health taxes. The proposal was rejected and criticized by business organizations, who instead called upon the state to reduce expenditures.

In the meeting, Vega emphasized that the state spends half of its funds on education and that it receives fewer federal funds than other states.

Secretary Hernández appeared Wednesday at the Legislative Tax and Revenue Commission and told lawmakers the budget proposal was reduced to 55.7 billion pesos, or $2.8 billion, for next year.

According to the official, the state plans to spend 48 percent of its revenue on education, while increasing expenditures in health to build a new hospital in Tijuana.

The State Electoral Institute will also see an increase of funds due to the gubernatorial election of 2019.

Hernández explained that the revenue for next year was reduced due to the federal budget approved by Mexico’s Congress.

The new adjusted budget does not include tax and fee increases, he said.