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The consultation of the Governors to break the fiscal pact collides with the Supreme Court

Javier Corral, governor of Chihuahua, with Enrique Alfaro, governor of Jalisco, in a meeting in September.Darkroom

The open front between opposition governors and the government climbed to a new level on Tuesday. The 10 state leaders who already broke ties in September with their departure from the federal negotiating table (Copay) once again carried their favorite workhorse: the fiscal pact, the distribution of tax revenues that the federal State makes. Faced with the insistent complaints from Jalisco or Nuevo León, who consider the system “abusive”, Andrés Manuel López Obrador responded with the proposal that they make a consultation to assess the degree of discontent of the citizens. The Governor of Jalisco, Enrique Alfaro, was the first to accept the president’s pulse. This Wednesday, Nuevo León, Guanajuato, Aguascalientes and Michoacán have followed.

The five governors are ready to play the card of the consultation. But the legal viability of one of López Obrador’s favorite instruments is not so clear, from its most rigorous version, in accordance with constitutional regulations, to more informal options such as those carried out with the airport to the Mayan train, mere political stratagems without legal coverage. The first, the possibility of organizing a citizen consultation according to the channels established by the Constitution, faces serious adversities. The regulation itself establishes the requirements that the consultation must be of national or regional interest and leaves out of the question any question related to the expenses and income of the State.

There are even precedents of the Supreme Court of Justice. The highest court in the country has recently rejected two proposals for consultation, precisely because they deal with budgetary and fiscal issues. In October 2014, PAN parliamentarians launched a consultation on the suitability of raising the minimum wage. While just a month later, the highest court also backed down another attempt, this time from the ranks of Morena, to open the discussion on energy reform.

“Six years ago it seemed that the constitutional route for consultations was going to be a dead letter. And that almost any matter related to income and expenses was going to be excluded ”, points out Javier Martín Reyes, professor of constitutional law at the CIDE Legal Studies. “However, the latest resolution of the Supreme Court has greatly lowered the bar for the origin of a query, opening the door to ask whether this relaxation of standards means that magistrates are more receptive today.” The constitutionalist refers to the unexpected resolution earlier this month that endorsed López Obrador’s initiative to carry out a citizen consultation on whether or not the former presidents should be tried.

Beyond the hypothetical final position of the Supreme Court, the option most likely a priori to succeed would be the convening of a consultation at the state level. The Jalisco Constitution, for example, accommodates these instruments with accessible requirements: both the governor and 50% of the local chamber could carry it out. “The third possibility in any case would be a consultation outside the law, which was not covered by the regulations, as has already happened with the airport and the Mayan train,” adds Martín Reyes.

Freehand consultation

In their latest statements, the governors themselves admit the technical difficulty of the proposal – in theory set to coincide with next year’s elections – and outline the inevitable political and electoral bias. “We are going to take the president at his word. It does not necessarily have to be constitutional. We are going to do it by show of hands, we are going to go everywhere to ask, ”announced this Wednesday the independent president of Nuevo León, Jaime Rodríguez. Very similar was the intervention of Alfaro, from Movimiento Ciudadano. From the rostrum, he improvised another vote by show of hands during an act with ranchers and milk producers.

“By the level of the statements, everything indicates that it is a political action rather than a legal proposal. Because although the law allows room for consultation and even for breaking the fiscal pact, the most affected would be the governors themselves ”, points out Hugo Concha Cantú, researcher at the UNAM Institute of Legal Research. The state Congresses have in fact the power to revoke the agreements signed in the Federation, by which the local treasuries collect the federal taxes and send them in full to the Secretary of the Treasury.

“It would be unprecedented for a State to revoke its agreement. And it would also lose a series of incentives that it assumes when collaborating with the Federation, “adds Concha Cantú. Leaving the fiscal pact would not imply keeping the taxes that the States collect. In fact, a breach of the pact would mean that local treasuries would stop collecting those federal taxes. The Treasury would do it directly, who later distributes the total purse in the form of shares and contributions. For this year, the total income of the entities will be around two trillion pesos. Of that total, 87% correspond to federal transfers.

That is the touchstone of the northern states, the most industrialized area of ​​the country. They consider unfair the distribution of tax revenues made by the federal state, based on the principle of solidarity and distribution between rich and poor states. In a context in addition to strong budget cuts, the spokesmen of the opposition governors, the so-called Federalist Alliance (AF), which has become one of the strongest poles of opposition, even sued the central state if it does not back down in the cut of 5 , 5% in the transfers that the federal budget project for next year establishes.

The governors’ position also included a meeting with the Secretary of the Treasury, Arturo Herrera, to propose an alternative plan to keep federal funding flowing. Herrera himself came out this Wednesday in the wake of the controversy, recalling that the last reform on the system of distribution of income and expenses was carried out by the Government of Felipe Calderón. “It never ceases to amaze me,” Herrera said in a tweet, “that some of the most recurrent questions about this arrangement come from members of the PAN.”