A to Z of revenue debate as senators meet, again

For the ninth time in as many weeks, the Senate will hold a special sitting today to decide on the third criterion of sharing revenue among counties in the next five years.

Until last week, 11 proposals were on the table and the House must make a decision today.

Today, the Nation explains the suggested amendments and what they portend for winners and losers.

CRA proposal

It has 10 parameters of sharing Sh316.5 billion — health (17 per cent), agriculture (10 percent), population (18 per cent), ba sic share (20 per cent) and land area (eight per cent).

Others are roads (four per cent), poverty (14 per cent), urban service (five per cent), fiscal effort (two per cent) and fiscal prudence (two per cent).

In the CRA formula, 22 counties lost their allocations relative to the 2019/20 while 25 had significant gain. However, CRA recommended that the National Treasury sets aside a special fund for the 22 counties who stand to lose.

Senate Finance Committee report:

After considering the CRA formula, the committee varied the parameters in its report and if adopted, 28 counties will have their allocation raised compared to 2019/20 while 19 will comparatively lose out.

Sakaja Amendment:

The proposal fronted by Senator Johnson Sakaja seeks to retain allocation per county as was the case in 2019/20. From next year, amount below Sh316.5 billion be subjected to the 10-parameter formula as a figure above Sh316.5 billion be subjected to a seven-parameter formula There are no gainers or losers but there will be marginal increases in 2021/22 financial year.

Mutula Kilonzo Junior Amendment:

Mirrors Sakaja’s amendment, only that where the equitable share is above 316.5 billion, he proposes application of the 10-parameter formula.

Kimani Wamatangi:

For this year, retain allocation per county as was the case in 2019/20. In 2022/23 adopt the 10 parameter formula as follows; population 16 per cent, health (20 per cent), Agriculture (12 percent), urban services (4 percent),  poverty (14 per cent), land area (5 per cent), fiscal effort (1per cent), roads (7 per cent), fiscal prudence (1per cent) and basic share (20 per cent).

If adopted 18 counties lose out, while 29 gain. The amendment proposes that National Treasury provide additional funds equal to the losses arising from the application of the formula for the 2021/22 budget to cushion the losing counties.

Linturi amendment:

Further amends the Sakaja proposal and proposes that equitable share not exceeding Sh270 billion be subjected to formula in which population 45 per cent, equal share (26 per cent), Poverty 18 per cent, land area (8 per cent), fiscal effort (2 percent) and development factor (1 per cent).

Equitable share above Sh270 billion should be subjected to the new formula as follows: population 16 per cent, health (19 percent), Agriculture (11 per cent), urban services (5 per cent), Poverty (14 per cent), land area (8 per cent), fiscal effort (1per cent), Roads (6 per cent), and basic share (20 per cent).

After last week, it was not part of the Sakaja amendment after senators approved the amendment. Under this, formula, those losing out have not been cushioned.

Petronila Were Amendment:

Retains the second generation formula for the 2020/21 allocation as it seeks to increase county revenue share to Sh348 billion If adopted, nine counties will lose amounts ranging between Sh1.2 billion and Sh48 million, while 38 others will gain amount ranging from Sh97 million to Sh3 billion.

Orengo Amendment:

CRA to review its original proposal taking into account the report of the committee on Finance and concerns raised by senators and submit the revised recommendations to the Senate within three months, taking into account additional parameters.

Olekina Amendment:

Ninety per cent of the Sh316.5 billion be shared based on 10 parameters: population 18 per cent, Health (17 per cent), Agriculture (10 per cent) Urban (5 per cent), Poverty (14 per cent) Land Area (8 per cent), fiscal effort (2 per cent), Roads (4 per cent), Prudence (2 per cent) Basic Share (20 percent).

Under this formula, only 6 counties gain, with the rest losing out. However, there is the 10 per cent to cushion all the losing counties.

Abdullahi Ali Amendment:

Ninety-five per cent of Sh316.5 billion using 10-parameter formula. Five per cent of the allocation to cushion counties that will have reductions in their allocations compared to 2019/20 until such a time when the equitable share reaches Sh395 billion.

The gains and losses are similar to ole Kina’s only that the figure to cushion the 41 losing counties is 5 per cent of the Sh316.5 billion

Mwangi Githiomi Amendment:

Seventy per cent of allocation shared equally by all the 47 counties, while 30 per cent be subjected to the criteria developed by the committee with population and health index getting the lion share.

Irungu Kangata Amendment:

Adopt the committee’s report but the implementation suspended for two years. This was debated and rejected by the House.

The motion on the floor is the Report on the committee as amended by both Sakaja and Linturi proposals.