Lebanon News

Municipalities fear slow death from revenue deductions

A big chunk of the central government deductions will go to pay for the services of Sukleen (The Daily Star/Hasan Shaaban)

BEIRUT: Municipalities from various parts areas of the country have warned that most of their development projects will be scrapped following the government’s decision to cut up to 80 percent of their annual share of revenues.

The deductions were set in motion by the Finance Ministry, and endorsed in a decree passed by the Cabinet earlier this year. According to ministry officials, the cuts in the municipalities’ share of revenues this year were a normal legal and financial procedure based on their respective debts to the state treasury.

“A deduction of 80 percent from revenue shares of the municipalities will stop the development projects and all the services that the municipalities had initially promised and planned in their budgets that were passed in September 2012,” a group of mayors from Baabda and Metn said in a statement this week.

“None of these deductions were taken into account when the budgets were passed,” added the mayors, representing municipalities that fall in Beirut’s suburbs, such as Ghobeiri, Shiyah and Hazmieh.

A large chunk of the funds, amounting to LL417 billion ($278 million), will go to the treasury to pay the municipalities’ dues to state-administered projects and to cover the expenses of Sukleen, a private firm contracted by the state to keep the streets of the capital and Mount Lebanon free of garbage.

The disbursement of a further $1.2 billion is still being negotiated among the Interior, Telecoms and Finance ministries. The $1.2 billion is an approximate sum of the revenues accumulated from the telecoms sector since 1994.

Zghorta Mayor Tony Suleiman, quoted in an interview with a news website, said the government deducted approximately LL300 million from his town’s share of revenue “under the pretext that we have debts and we have to pay for the electricity sector and garbage collecting.”

“Such a deduction from Zghorta, which has an annual budget of LL700 million to support 25 towns, will make the continuity of its work almost impossible,” Sleiman said.

“How can we pay the salaries of the municipality employees and ensure the towns remain clean and safe?” Suleiman asked, predicting the move would have negative social, economic and developmental repercussions.

Criticizing the deduction, Metn MP Ibrahim Kanaan told The Daily Star the state treasury was getting “bigger and bigger” at the expense of the municipalities across the country, arguing that the municipalities would go bankrupt if the trend continued.

“This year the deduction was 80 percent. What if it becomes 100 percent next year?” Kanaan said.

But Finance Ministry spokesperson Violette Khairallah called most of the criticism against the deductions “baseless,” saying: “I think Mr. Kanaan has not read the decree correctly; he has read it upside down.”

“Not all municipalities saw 80 percent deductions; the cuts they received depended on how much they owe.”

A version of this article appeared in the print edition of The Daily Star on April 27, 2013, on page 3.




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