High Court Orders Funds for Road Repair

EMBATTLED Finance MinisterFederico Carrillo, already in conflict withthe Legislative Assembly and myriadgroups clamoring for government funds,now faces a ruling by the ConstitutionalChamber of the Supreme Court (Sala IV)ordering the Finance Ministry to pay out¢10 billion ($22 million) to local governmentsfor road repair.The ten municipalities whose lawsuitprompted the ruling claim Carrillo isbreaking the law by withholding tax revenuesthey need to repair and maintaintheir roads, while Carrillo says the centralgovernment does not have the money anddistributing the funds will place CostaRicans further in debt.In a statement from the FinanceMinistry Wednesday, Carrillo also allegedthat to finance the payments, the ministrymay have to cut funding to theProsecutor’s Office, Legislative Assemblyand government programs.THE Sala IV ruling, handed down lastweek, refutes the notion that certain taxrevenues can be distributed at the discretionof the government according to thenation’s needs. It says the FinanceMinistry must spend tax revenues on thepurposes for which they were collected.On Friday, the Finance Ministryrequested clarification from the Sala IVregarding exactly which taxes are includedin the new ruling, using an argument thatwould have prevented the Ministry fromhaving to pay the municipalities.However, the Sala IV rejected hisrequest, saying the government must applyLaw 8114, which says 30% of the gasolinetax must be spent on repairing the nation’sroads.Of this, 25% corresponds to municipalitiesto repair 28,500 kilometers of roads.“WE have been fighting for this sinceMarch,” Juan Rafael Marín, mayor ofHojancha in northwestern Costa Rica, toldThe Tico Times Wednesday. “We are veryhappy to have advanced this far.”The municipalities that filed the courtcase in October are Hojancha, Nadayure,Nicoya, Orotina, Puriscal, Aserrí, SanMateo, Heredia, Los Chiles and Montes deOro.Municipal leaders are still concernedCarrillo may try to place conditions on thefunds, according to Marín.“If he does, we will file another suit,”he said.ON Tuesday afternoon, just before theSala IV announced its response to theMinistry’s appeal, Carrillo begrudginglyadmitted he would abide by the chamber’sdecision. However, he said because thecentral government is already so short offunds, the expenditures will ultimatelyincrease the national debt, thereby worseningthe economic situation of all citizens.“If the Sala IV tells us we can placeCosta Ricans in debt to satisfy thedemands for local roads, we will do it,” hesaid, but “it’s not fair when an indigenousfamily that doesn’t even have a road has topay to fill a hole in the road in front of thehouse of a millionaire who hasn’t evenpaid his income taxes.”THE Ministry based its Nov. 12appeal on the argument that while the SalaIV ruling deals specifically with revenuefrom new taxes, the fuel tax in questiondid not generate new revenue and is thereforeexempt from Law 8114.He added that another law, 8131, prohibitsthe Ministry from putting itself furtherin debt in order to make such payments,but Sala IV justices apparently didnot agree with him.In Wednesday’s statement, Carrillosaid the central government has incurreddebt of ¢180 billion ($400 million) thisyear alone in meeting its obligations.He also pointed out the municipalitieshave failed to collect approximately ¢26billion ($58 million) in municipal taxes(TT, Nov. 12) – more than 1.5 times theamount they have demanded from theMinistry.Marín, however, said this figure palesin comparison to the taxes the central governmenthas failed to collect.The tax revenue conflict is one of twoongoing controversies related to the extentof the Finance Ministry’s discretion inspending public funds.Carrillo has expressed his disapprovalof the Legislative Assembly’s revisions tothe 2005 national budget, approved in firstdebate by the Legislative Assembly Nov. 8(TT, Nov. 12).The assembly reappropriated fundsintended for debt interest payments inthe Ministry’s original budget, butCarrillo maintains he will not complywith the changes and that the legislature’sbudget is not a mandate for theMinistry (TT, Oct. 29).