The official is confident in the collection rate of the country’s capital. “I think that a very important point is, we start, let’s say, with income that is solid in the city. That is a very good thing.”
For this year, Mexico City estimated its income at 267,965 million pesos (mp), of which 138,162 million pesos come from participations and contributions and the rest, from all the rights, uses and taxes charged by the local government, being the of assets, such as property, vehicle ownership and acquisition of real estate, the most important and leaving the city more than 36,500 million pesos. The debt approved for 2024 was 2,500 million pesos.
De Botton says that he has reviewed the accounts with the Treasury team and that the collection level set out in the Income Law will be met.
“We are going to meet the goal that was established since the Budget was approved and in that sense we are not going to have deviations from the approved debt. “I believe that the debt that was approved by the City Congress and that we received that budget as such, is very prudent, in fact it is the lowest within the six-year term that is ending,” he assures.
Information from the Ministry of Finance and Public Credit (SHCP) shows that Mexico City’s debt amounts to 98,354 million pesos as of the second quarter of this year.
For the federal agency, the amount of the country’s capital’s commitments is in a manageable situation. This is shown in the traffic light of the Alert System, which in the case of the city, which Clara Brugada now governs, is green. It means that the entity’s debt level is in adequate figures with respect to its income and under control regarding the short-term obligations it has with suppliers and contractors.
“I consider that the important thing is to maintain that strength that the city has. That implies a strategy that keeps us in a solid position where we can have responsible public finances and can meet the needs of the budget.”
Juan Pablo de Botton, Secretary of Finance of CDMX.
The lessons learned
Where will the resources come from? Will it be enough for all the commitments we have? Will it be necessary to update the city cadastre, raise taxes or readjust Metro rates or water services? De Botton does not answer it, but under his arm he carries the experience of what was done in the administration of President López Obrador to significantly increase tax revenues.
The recipe says: not condoning taxes, strengthening oversight to charge everyone what their contribution to public services should be.
“I consider that the most important lessons regarding how to finance the development and particularly the transformation of the country and the city, since we were there both in the administration of Claudia Sheinbaum, the current president, and of President López Obrador,” he emphasizes.
At the federal level, López Obrador’s administration closed with record figures, since without a tax reform, tax collection was reinforced as the main source of income for the public treasury. In 2019, tax collection contributed 59.5% of total public income, by 2023 it represented 64.2%, and by the end of 2024 it is expected to be 66.5%.
Not only that, De Botton highlights that at the same time there was also a relevant reduction in the government’s own operating expenses where operating expenses were reduced by 26% in real terms between what was in 2018 and the closure of administration in 2024.
“We show that the same goals can be reached, but by removing duplications and improving by making efficiencies and I believe that that would be the recipe to be able to finance the different projects that have to be done here in the city.”
The official summarizes his proposal to bring the finances of this city to the phrase “continuity with change”, that is, giving continuity to the good work in the city’s finances, particularly what was done in the Treasury.
“It is a continuity project that we are going to have in terms of income, in terms of spending. And of course, continuity with change, right? It is about continuing to build the city we want, a sustainable, transformative city, making Mexico City the best city in the world, as the head of government has indicated to us,” says the official.
