• Costa Rica Real Estate

Lawmakers hand Solís administration a big win by rejecting 2015 budget cuts

November 21, 2014

Costa Rican President Luis Guillermo Solís has won perhaps one of his biggest challenges to date, as lawmakers on Thursday struck down three separate proposals to slash the administration’s ₡7.9 trillion ($14.5 billion) budget proposal for 2015.

On Thursday evening, legislators engaged in a heated debate before voting against all three of the budget-reduction proposals. The most prominent of those, drafted by the Assembly’s Financial Affairs Commission, sought to reduce the Solís administration’s proposal by ₡97 billion ($178 million). It also would have allowed the government to defer for up to five years debt payments of ₡100 billion ($184 million).

Several lawmakers were absent during the voting. The first proposal received only 23 votes in favor – six shy of the 29 required for its approval. Among the “yes” votes were legislators from the National Liberation Party (PLN), the ruling Citizen Action Party’s Ottón Solís and Epsy Cambell, and the Christian Democratic Alliance’s Mario Redondo. A total of 25 lawmakers voted “no.”

A second proposal to cut ₡40 billion ($73 million), submitted by two Broad Front Party lawmakers, also was rejected, along with a ₡60 billion ($100 million) reduction proposal by Redondo.

At approximately 7 p.m., Assembly President Henry Mora closed the legislative session and announced that discussions would resume on Monday, with the original budget proposal submitted by the executive branch last September left intact. Costa Rica’s Constitution requires lawmakers to approve a national budget by Nov. 30 of each year.

The Broad Front Party’s top lawmaker, Gerardo Vargas, said he was pleased with the voting because “public agencies and popular sectors of the country will not be affected.”

President Solís’ 2015 budget proposal would spend 19 percent more than this year’s budget, which totaled ₡6.6 trillion ($13 billion).

Financial Affairs Commission Chairman Ottón Solís – a member of President Solís’ own party – reacted by saying he is deeply concerned about last night’s voting, because “the [original] budget proposal will further damage public finances.”

The PLN’s Karla Prendas also lamented the commission’s work to reduce government spending during the past two months. The proposed cuts would have included public employee salaries, overtime, vacation pay, office rentals and external consulting, among others.

“If they don’t want to cut spending, then they should forget about asking Costa Ricans to pay more taxes,” Redondo snapped after voting ended. “This government doesn’t want to cut spending, yet now they’ll be asking people to make sacrifices.”

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