Fiscal decentralization, federal resources and municipal public revenues in Mexico

Abstract

In 1983 all municipalities in Mexico absorbed 2.6% of national public revenues, being that by 2019 it reached 6.6%, thus showing a substantial growth in 36 years. Of the total municipal public revenues, federal participations represented 37.1% in 2018 and 37.1% in 2019, while federal aportments represented 35.9% in 2018 and 35.3% in 2019; both federal resources meant 73% in 2018 and 73.8% in 2019, that is, out of every 4 pesos of revenues 3 come from the federation. In 2019, the main revenues of the municipalities that come from federal funds are: General Participation Fund (23.1%); FORTAMUN (15.2%); Social Infrastructure Aportments Fund (12.79%). The tax effort or municipal own revenues accounted for 22.6% of total municipal public revenues in 2018 and 23.1% in 2019. Property tax is the main figure of municipal own revenues, representing 47.1% and 45% respectively in 2018 and 2019.As an international comparison point property tax related to GDP yielded these figures: France 4.03%, Great Britain 4.08%, Canada 3.87%, United States 2.96%, Spain 2.43%, Colombia 1.79%, Chile 1.12% and Mexico only 0.33% of GDP; appreciating a very low percentage in relation to the two Latin American nations and much lower compared to developed countries.