Economy

Factor county wage bills in revenue splits, CRA says

The Commission on Revenue Allocation has presented the Senate with a new proposal on sharing national government funds between counties.

The recommendations should be effected in the next three fiscal years starting from June 2015/2016.

The commission has suggested two additional parameters for revenue allocation in counties. These are development factor and personnel emolument factor. The two will represent one and two per cent of the shared resource respectively.

“To assist county governments meet their wage bills and cushion counties that are experiencing extra personnel emolument costs, a new parameter, personnel emolument factor has been introduced,” CRA said in a media statement.

The development factor, CRA says, is meant to provide funds for service provision in education, health, water and sanitation. 

“This will be in relation to (various counties’) respective levels of development,” the commission added.

The recommendations are in line with Article 216 (1, b) of the Constitution which underpins the mandate of the commission.

At present, CRA has shared out a portion of national government’s annual revenue based on five parameters - population, poverty, land area, equal share and fiscal responsibility.

Equalisation fund, which refers to money given to least development counties as incentive to build on infrastructure, is enshrined in the Constitution.

Lamu and Turkana counties are among the 14 counties which qualified for allocation. The two marginalised counties took the largest share of the monies. This was Sh271 million for Turkana and Sh186 million for Lamu.

READ: Cheserem names 14 counties to benefit from equalisation budget

The Senate must scrutinise and approve the recommendations before they can be used in a new formula. This comes amid a clamour by governors for increased revenue allocation to counties.