The City Council of Mérida, led by Mayor Cecilia Patrón Laviada, projected a total revenue of $6,188,821,981 for 2025. However, this target will be difficult to achieve following the State Congress’s rejection of the Treasury Law.
Financial Impact
Marisol Cen Caamal, Director of Municipal Finance and Treasury, explained that the rejection of the Treasury Law prevents the city from reaching the projected revenue, as the necessary concepts and mechanisms for resource collection are not authorized.
Basis of Financial System
The Income and Treasury laws form the foundation of a municipality’s financial system. The Treasury Law establishes the legal framework, concepts, and general rules for revenue collection, while the Revenue Law translates these provisions into a plan, indicating expected collections from each source. Both laws must be approved together to ensure efficient and legally-based financial management.
Projected Revenue Decrease
The projected revenue for 2025 represented a 3.51% increase compared to the previous year’s budget, below the estimated inflation rate of 4.3% for the end of 2024. The rejection of the update to cadastral values will result in a projected decrease of about 115 million pesos in revenue for 2025.
Property Tax Impact
The proposal for cadastral values aimed to ensure greater fiscal progressivity, minimizing the burden on lower-cost properties while impacting new and higher-value properties up to 9.7%. This decrease will affect property tax collection and the provision of resources for 2025, as well as the shares the city will receive in 2026 based on its collection efforts.
Importance of Property Tax
Property tax represents approximately 20% of Mérida’s income, making it a key source for the municipality’s financial operations and responsibilities. The tax is calculated based on the cadastral value, considering location, use, and physical characteristics, ensuring that more valuable properties contribute more.
Impact on Public Services
The revenue shortfall will affect essential services such as public lighting, street maintenance and paving, park and garden conservation, and security strengthening. These services are crucial for improving the quality of life for Mérida’s residents and contributing to the community’s development and well-being.
Source: Diario de Yucatan
