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In the Bill, the Treasury and senators allocated Sh2.54 trillion to the national government and Sh391 billion to the devolved units.
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However, the senators adjusted allocation to Sh2.52 trillion for the national government and Sh415 billion to the counties.
Image: LEAH MUKANGAI
Senate and the National Assembly have clashed over allocation to counties in what now threatens to derail the passage of a crucial legislation to pave the way for reading of 2024-25 budget.
Senators have resolved to give the counties Sh415.95 billion, up from Sh391 billion allocated by the National Treasury and approved by the National Assembly.
“As much as I will read the bill as proposed, I must also make my comments on what the committee found and what I agree with them,” Senate Majority leader Aaron Cheruiyot said.
The Kericho senator spoke while supporting a report of the House Finance and Budget committee as "founded on good reason and logic" that proposed an allocation of Sh415 billion.
The standoff has threatened to delay the passage of the Division of Revenue Bill, 2024 – a piece of legislation that splits between the national and county governments funds generated nationally.
Effectively, the Bill will be subjected to a mediation committee – comprising equal numbers of the Senate and the National Assembly – to strike a middle ground.
The process is likely to take longer, a move that could delay the announcement of the budget estimate.
An advisory delivered to Parliament by the Supreme Court said that a Division of Revenue Bill and a County Allocation of Revenue Bill ought to be introduced in Parliament by April 30 each year.
The High Court in 2020 ruled that the Division of Revenue Bill must be approved by Parliament before tabling of the Budget Estimates and reading of budget speech by the Treasury Cabinet Secretary.
In the Bill, the Treasury and senators allocated Sh2.54 trillion to the national government and Sh391 billion to the devolved units.
However, the senators adjusted allocation to Sh2.52 trillion for the national government and Sh415 billion to the counties.
Senate Budget and Finance Committee chairman Ali Roba said they proposed the increased allocation after careful consideration of several factors, including inflation and collective bargaining agreements that increase county wage bill.
“There are legislations that have financial implications to county governments, which is the agenda for the national government to pass,” Roba said.
The Mandera senator cited the housing levy and the National Social Security Fund that have serious implication on county governments' payroll.
The Ministry of Health has already committed that they are going to pay the arrears amounting to more than Sh3 billion in terms of when the CBA was signed up to 2024.
Once the arrears are settled, the county governments will be required to inherit that expenditure directly.
“Once they inherit, the doctors must be paid because that is an expenditure and the payroll numbers are going to increase. Hence, it is non-discretionary expenditure to county governments because they have to foot that bill of Sh5.8 billion,” Roba said.
The housing levy will cost the counties Sh4 billion in terms of the upwards growth of the payroll while the NSSF will cost counties Sh3 billion.
“These are legislations that are passed nationally and we are all subject to them. The impact in terms of the cost needs to be rationally looked at when allocating vertical share of revenue between national and county governments,” Roba said.
He added that the counties need to get Sh5.64 billion for managed equipment service project that has since been discontinued and the burden passed to the counties.
Vihiga Senator Godfrey Osotsi called on the senators to stand firm and protect the interest of the counties and their governments.
“I request colleagues in this House to stand firm and approve the recommendations by the committee that the shareable revenue for our counties be Sh415.9 billion,” he said.
Senate Budget and Finance Committee vice chairperson Tabitha Mutinda said the increment of county allocation was not only "general feeling, but general fact."
“It is the general fact that we are giving counties Sh415 billion. As a committee, we considered very many factors. Inflation has gone up. We have housing levy and many others,” Mutinda said.