Talks on a compromised version of the 2019 Division of Revenue Bill collapsed Thursday when the Senate team walked out, spelling trouble for county government operations.
With just hours before Treasury Cabinet Secretary Henry Rotich delivered the 2019/2020 budget plan, the bill that allocates funds to the two levels of government had not been enacted.
In the meeting, each party stuck to its earlier position on the amount of money that counties should get.
The National Assembly had revised its earlier position and proposed that counties get Sh316 billion while the Senate insisted on Sh327 billion.
Article 311 of the Constitution states that if the mediation team fails to agree, the bill is defeated, meaning there will be no Division of Revenue Act 2019 and another one will have to be introduced.
It is believed that senators on the committee walked out because they were angered by comments from National Assembly Majority Leader Aden Duale, who had told the panel to be grateful for the Sh6 billion they had ceded during the talks.
“You should be grateful because we have added Sh6 billion to the Sh310 billion in the bill,” Mr Duale said.
The senators argued that the negotiations were prejudiced because the National Assembly team had adopted language similar to that of the Treasury.
The total allocation for counties in the 2018/19 financial year was Sh314 billion. This means that the figure would be the base for the 2019/20 allocation.
But the Treasury sliced it to Sh310 billion, explaining that there was underperformance in revenue collection.
It is on that basis that the Senate amended the bill and raised counties’ allocation to Sh335 billion in line with proposals by the Commission on Revenue Allocation, which is legally mandated to determine the share going to each level of government.
At the negotiating table, senators stuck to their figure, arguing that they want to use Sh314 billion as the baseline figure and add four per cent for inflation.
National Assembly representatives, on the other hand, argued that the real problem counties face is not the amount of money they get but when it is released by the Treasury.
“Next time we will request the Senate Speaker to send members with a financial background to the mediation committee,” Mr Mbadi said.
He accused his Senate colleagues of pushing for more money for counties without indicating where it would come from.
“The Senate thinks there is money somewhere — we cannot borrow to finance counties,” Mr Mbadi said.