Original article: «Vecinos de todo Chile, con sus impuestos, deberán financiar los presupuestos estratosféricos de las comunas de mayores ingresos»: Alcaldes criticaron fórmula de compensación a municipios incluida por el gobierno en megarreforma

Local Leaders Criticize Government’s Plan to Fund Wealthy Municipalities with Taxpayer Money

Several mayors across the country have swiftly rejected the latest provision introduced by the Executive during an «express» session of the mixed Senate-Chamber commission, amid discussions on the «reconstruction» bill pushed by the Kast administration.

This provision relates to the financial compensation formula for municipalities losing revenue from property taxes for residents aged over 65. The government proposed that these funds be allocated from the Public Treasury, meaning through the national budget, which has drawn immediate criticism from mayors.

One of the first to respond was Tomás Vodanovic, mayor of Maipú, who termed the news as «disappointing»: «Municipalities like Las Condes will stop collecting $13 billion as their residents will not pay property taxes. Yet, the State decides to fully compensate those losses through the national budget.»

«In other words, residents of Maipú and the rest of Chile will have to finance the extravagant budgets of wealthier municipalities with their taxes. This only exacerbates the existing massive inequalities and promotes a highly regressive funding model,» emphasized the mayor of Maipú.

Following this, Vodanovic pointed out that «those living in poverty who must accept their municipalities lack resources for basic services will have to use their taxes to fund luxury services for those who have more. They claimed to support the middle class, but have done the opposite. Chile is becoming an even more unequal country. Disappointing.»

Similarly, Javiera Reyes, the mayor of Lo Espejo, urged that 100% of the resources allocated for compensation should go to the Municipal Common Fund, from which funds would be distributed to municipalities regardless of their income levels.

«The government’s megareform proposes to deepen disparities among municipalities. It’s unacceptable that while Lo Espejo would receive $4 million in compensation, a municipality like Las Condes would get $13 billion,» stated the local authority.

«This is not a fair redistribution. If we previously endured a regressive tax system, the situation is now worse. Therefore, we call on legislators to prevent Chile from becoming a more unequal country,» added Mayor Reyes.

Consequences Followed

By the end of this report, it was being reported that the government had removed the urgency from its megareform proposal due to insufficient Senate votes to approve this specific provision regarding municipal compensation. Consequently, the initiative will be voted on during the first week of August.

Once this news broke, Congressman Jorge Brito (FA) labeled it a «legislative embarrassment.»

«They rushed the Mixed Commission, forced us in the Chamber… and in the Senate, the Government lacks the votes to approve its megareform. They suspended the session and changed the urgency. We warned them: without dialogue or agreements, poor reforms collide with reality,» Brito asserted.

Senator Diego Ibáñez commented that «Quiroz’s proposal to compensate municipalities is so bad and improvised that it does not even have the votes of its own sector in the Senate. They summoned us in the midst of the crisis for a quick vote and now they remove the ‘urgency’, suspending and dodging their own embarrassment.»

We will continue to provide updates.