EXPLAINER: A colossal P51.45B budget for Cebu City in 2023. Is City Council humoring Mayor Rama? We’re giving him ‘benefit of the doubt,’ says Kons Wenceslao. Controls will guard against deficit spending, he says.

THE 2023 Cebu City budget in the enormous amount of P51.45 billion was approved Wednesday (December 28, 2022) by the City Council with a 10-3-1 vote despite this nagging fact: They’re not sure if the City can raise most of that money.

The budget has been described by proponents as “the biggest,” “historic,” and “pace-setting” -- and by critics as “overly ambitious,” “illogical,” and hastily approved. On amount alone, compare Cebu City’s P51.45B 2023 budget with Quezon City’s P33.54B or Manila’s P22.2B for the same year.

Mayor Mike Rama who vigorously pushed the behemoth of a budget seems to be getting what he wants. Some councilors, including two administration stalwarts, cautioned that the mayor might be wishing for the moon. Yet most of them voted for it.

PRICE TO PAY. The mayor has tied the budget, along with the multiple tax increases, with his plan for a “Singapore-like Cebu City.”

Atty. Jerone Castillo, Rama’s special assistant on fiscal matters, earlier made it clear at the Sanggunian that the big spending and the higher taxes are the price that “you, me, we” -- everyone -- must pay.

‘WE’RE NOT HUMORING MIKE.’ Councilor Noel Wenceslao, chairman of the committee on budget and finance, told Explainer Thursday (December 29), “No, we’re not humoring the mayor.” In approving the huge budget, “we’re giving him the benefit of the doubt.”

Wenceslao repeatedly said “benefit of the doubt,” apparently to deflect the “humoring” bit about the Sanggunian’s motive. Which must mean the 10 councilors who voted for the ordinance think the mayor, per standard definition of the phrase, is “honest or deserving of trust even though there are doubts.”

That’s the majority camp’s admission of doubts, also voiced by the three opposition votes, which were more explicit but obviously too feeble to obstruct or delay the ordinance.

OBJECTIONS. The budget defies logic, Councilor Mary Ann de los Santos (BOPK) told her colleagues Wednesday. She was skeptical if the money could be raised. The treasurer’s office has fallen short of collection target in the past three years: Can it do better next year? Increases in taxes had yet to be approved and if passed couldn’t be immediately collected: Where’s the sound budgeting?

“We don’t understand what we’re approving,” said Majority Floor Leader Nestor Archival Sr., slamming the “late” distribution of papers required for the discussion. Archival said he got the documents only that session day . He doubted if his colleagues understood it. They could be passing another piece of legislation without “perusing” it, as they admitted they did when they approved in January 2021 the Carbon Market joint venture contract with all the defects they later “corrected” in a supplemental MOA.

‘CONTROLS’ IN THE BUDGET. To avoid deficit spending or bankruptcy – the “B” word one councilor mentioned at a session -- they have adopted two safeguards, Councilor Wenceslao told Explainer. Those are:

[1] CAP ON CAF. Every quarter next year, the CAF or certification on availability of funds will cover only 75 percent of the actual revenues collected, thus putting a cap on the executive department’s spending. Any spending in excess of the 75 percent requires approval of the Sanggunian.

[2] RE-APPROPRIATION. Capital outlays in the next year’s budget that are unspent during the year shall not be deemed continuing appropriation – “ordinarily, they may be spent within five years” -- and shall require re-appropriation.

In theory, that ties the hands of the mayor and his department heads. Even though they are supposed to be given the P51 billion plus, spending will depend on 75 percent of the actual cash collected by the city treasurer’s office. In practice, that may or may not work, given the power and influence of the chief executive within City Hall. Yet somehow it also makes the task of oversight by the Sanggunian heavier and its share of the blame bigger.

Wenceslao sounded confident they can dodge deficit spending and still give the mayor the resources he’d need to make the City “Singapore-like.”

HOW THE MAYOR’S TAKING IT. The mayor is aware of the conditions in the budget, Wenceslao said, citing discussion at the legislative-executive “bicameral” meetings.

Archival had feared his colleagues wouldn’t know what they were getting into but Mayor Rama must have thought out the risk on his office and political career. In many public comments about the budget, the mayor had talked of “political capital” he was investing in the twin bold moves of asking for the P51 billion spending money and multiple increases of taxes. He’d have a lot more to gain, or lose, here. []