Full legislature rejects 3.8 per cent cut in the 2015 national budget

Four political parties in the legislature rejected plans Thursday night that the budget submitted by the president be cut 3.8 percent.

Instead, some 25 lawmakers voted to go ahead with the original 7.9 trillion-colon ($14.6-billion) 2015 budget.

A legislative committee proposed the cuts amounting to 300 billion colons, some $555 million. Voting to reject the reduction were the  Movimiento Libertario, Frente Amplio, Accesibilidad Sin Exclusión and the bulk of Acción Ciudadana lawmakers in the Asamblea Legislativa. President Luis Guillermo Solís ran on the Acción Ciudadana ticket.

Otto Guevara Guth, the long-time leader of  Movimiento Libertario, broke with his party to support the cuts.

He said current law prohibits financing current expenses with debt.

Under the budget 3.7 trillion or $6.9 billion will be financed with debt. Only 4.2 trillion ($7.8 billion) will come from government income. In addition, the budget calls for 1.7 trillion colons to be paid as debt service on prior loans. That’s $3.2 billion.

The Solís budget is 19 percent higher than the previous year’s, and it contains more spending on social programs.

After the legislative budget committee voted to make the 3.8 percent reduction, a number of ministries and special interests launched campaigns to restore the cuts. They predicted damage to their missions if the cuts were not restored.

Meanwhile the Ministerio de Hacienda, the budget agency, said Thursday that the national deficit increased in October to 4.4 percent of the gross national product. The deficit in October 2013 was 4.1 percent.

The central government hopes to improve the financial picture with a series of new levies, including a 15 percent value-added tax to replace the current 13 percent sales tax. But these measures face tough going in the legislature.

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