The City Council approved joining a federal stabilization mechanism intended to lessen the effect of possible reductions in the federal revenue-sharing funds included in the municipality’s budget.
Puerto Vallarta’s City Council approved the municipality’s incorporation into the leverage mechanism of the Fondo de Estabilización de los Ingresos de las Entidades Federativas (FEIEF), Mexico’s Fund for the Stabilization of Subnational Government Revenues.
According to the municipal government, the mechanism is intended to protect the federal revenue-sharing payments received by municipalities when federal collections decline. Those payments are part of the revenue municipalities include in their budgets, and a drop in federal collections can also reduce the amount allocated to municipal governments.
Gibrán Villaseñor, the municipal head of Revenue, told the City Council during an ordinary session that the arrangement serves as a backup for such declines. Municipalities that join may receive compensation intended to reduce the effect of a decrease in federal revenue-sharing payments and provide greater stability for anticipated resources, according to the municipal statement.
The municipal government said the measure will allow Puerto Vallarta to have this protection mechanism in the face of reductions in revenue-sharing payments that have already occurred and others that could arise during the fiscal year. It said the decision seeks to provide greater certainty for public finances and protect resources intended to maintain services and address the needs of Vallarta families.
