The Commission on Revenue Allocation has set the stage for a clash in a proposal which makes population a key factor in determining counties' share of revenue.
The new parameter might see several devolved units lose cash.
In the proposed formula seen by the Star, the commission has fronted six guidelines from the current eight and varied weights for some.
CRA has retained the population index and assigned it the biggest weight – at 36 per cent – among the six.
In the current formula, the population weighs 18 per cent.
The move is likely to trigger an uproar from leaders from less populous counties.
A section of leaders from Mt Kenya, led by Deputy President Rigathi Gachagua, has been pushing for a people-leaning formula.
“On matters revenue sharing and for the avoidance of doubt, I am a believer and a proponent of one-man, one-vote, one-shilling [formula] because resources are about people,” Gachagua had said.
On geographical size, which is the other emotive parameter, CRA has attached a weight of 10 per cent from the current eight per cent.
This has also upset some leaders who have demanded that the geographical size include water bodies.
“Geographical area includes that space occupied by water. We have people in Migingo. Shouldn't they get services? I’m drafting my formula,” Migori Senator Eddy Oketch said.
Oketch is a member of the Senate’s Finance and Budget Committee which recently met the commission to discuss the proposed formula.
In the guidelines, CRA has retained the basic share but varied the weight from the current 20 per cent to 26 per cent.
“The basis is informed by the fact that a number of expenditures on the establishment of government are, to some extent, similar for all county governments,” it says.
The Roads index reduced to four per cent from eight per cent.
“The road measure is defined by the county’s classified road network (both paved and unpaved). It is based on the classification of roads assigned to county governments,” CRA says.
The poverty index is weighed at 23 per cent from 14 per cent.
“The basis uses the poverty headcount. This is used to address developmental gaps/economic disparities across counties in line with Article 203 (1)(f)(g)(i).”
CRA has introduced 'economic activity' as a new parameter and given it a weight of four per cent.
The commission has dropped Health, Agriculture and Urban Services which are weighted at 17 per cent, 10 per cent and five per cent respectively in the current formula.
“We want the commission to tell us how they came up with the parameters and weight they attached to each of them,” the committee vice chairperson Tabitha Mutinda said.
The new framework will dictate revenue sharing among the counties for five years, from 2025-26 to 2029-30.
However, while the commission stated that any changes (data/framework) to the revenue-sharing framework would occasion revenue shifts among county governments, it maintained that no county would receive less than what they received in the current financial year.
“To ensure that programmes and projects across counties are not negatively affected, the commission recommends that counties be held harmless,” the draft formula reads.
“Therefore, no county will get less than what they were allocated in the financial year 2024/25.”
CRA says it rejected various proposed parameters from stakeholders due to a lack of data on them.
They include incentives for economic output, blue economy, water and sanitation, security, infrastructure needs and disaster management.
The commission also rejected the county ‘fiscal effort and fiscal prudence’ citing the Senate’s decision that dismissed the two parameters in approving the current formula.