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It’s ‘crunch time’ for the city budget as mayor zero-budgets some projects and cuts back others

Cuenca Mayor Pedro Palacios says there are no alternatives to the deep cuts he proposes in the new municipal budget. “I realize some of the measures are extreme but we have to live within our means and some of the projects proposed by the previous government cannot be funded,” he says.

Mayor Pedro Palacios

In all, Palacios is cutting more than $56 million from the budget that will take the city to the end of 2019. “This is clearly an austerity budget that leaves little room to maneuver. The first obligation is to pay the debts that have already been incurred and maintain basic public services.”

Among the projects that will go unfunded for the remainder of the year are the restoration of the Febres Cordero school in the historic district and planning for Cuenca’s bicentennial of independence celebration next year. In addition, no funding is included budget for renovation of the football stadium or city markets, several of which Palacios acknowledges are in desperate need of repair.

“In general, there is no allocation for new projects in this budget,” the mayor says.

Palacios and several municipal council members say the final payment for the city’s tram system of $44 million, still months away from operating, is a burden that has an impact on all budget items. “It is an obligation that we cannot walk away from, unfortunately,” Palacios says.

Several council members object to cuts in ongoing city programs, such as cultural and international affairs. “Eliminating one million dollars from the cultural affairs budget is drastic,” says Councilman Roque Ordonez. “Art and culture are at the heart of Cuenca life and this cut will have a terrible impact,” he says.

The city budget office responds that a number of cultural projects currently underway will continue to be funded, including the restoration of three heritage houses in the historic district, the La Glorida sports complex and the Tarqui Guzho, de la Luz, La Libertad and Guataná megaparks.

Some city council members object to new expenses proposed by Palacios including a $307,000 increase in the communication budget and $1.8 million for consulting. According to Palacios, the expenses are necessary for correcting previous budget mistakes and creating “a more sustainable budgeting process for the future.”

16 thoughts on “It’s ‘crunch time’ for the city budget as mayor zero-budgets some projects and cuts back others

  1. Looks like Pedro Palacios will be an austerity Mayor, spouting drivel about balanced budgets. You always know the people, especially the poor people, are in for a rough time when politicians talk like this. One can also anticipate that there will be little if any infrastructure development.

    1. I did’t realize that advocating living within your means amounts to “spouting drivel”. The mayor has a background in business and unlike the previous administration, understands the importance of managing resources wisely.

      1. I agree. Living beyond the government’s means was one reason for the mess that Correa left the country in. Unfortunately, Moreno did not learn from that lesson and has continued the same policies of living on borrowed money … and borrowed time.

      2. Amen to that, brother. Please send that message to the current resident of the White House who is now presiding over a trillion dollar budget deficit for this fiscal year alone.

    2. “Spouting drivel about balanced budgets.” What!? It sounds like a breath of fresh air to me, compared to running huge deficits and leaving them for your successors to deal with.

      How about raising the ridiculously low property taxes on homes valued at more than $100,000 so that it wouldn’t hurt the poor. A couple of cents more on the IVA wouldn’t kill us either.

      1. Agree completely. I assume you also believe it should apply to the current resident of the U.S. White House, right?

    3. And you sound like an OLD tax and spend democrat from the old country. Please do justify profligate spending beyond one’s means.

  2. “I realize some of the measures are extreme but we have to live within our means and some of the projects proposed by the previous government cannot be funded,”

    Sounds like a responsible OLD U.S. republican, not like the current office holder who is presiding over a trillion dollar deficit for this year alone.

  3. Looks like the Mayor learned some lessons from all the failed and slum infested cities run by Liberal Demoncrats in the U S A. He just may have caught on in time to save Cuenca from becoming another super crap hole.

  4. Many of the comments prove my point of how people in the U.S. are socialized to think that balanced budgets, “living within ones means,” as common sense economic wisdom. The actual economic history of economies is the opposite however. Austerity measures designed to balance budgets historically lead to recession in capitalist economies. Recessions and depressions are painful for the working class and the poor. Some capitalists do fail during recessions, especially small ones, but recessions and depressions are good for the capitalist class as a whole, an extreme profits are made by the capitalists with capital still on hand to invest.

    The ignorance about the actual history is so great that one gets comments about Keynesian economics being horrible tax and spend unwise economic policy, when the actual history is the opposite – that the greatest period of growth and economic development for the masses in capitalist countries occurred when governments were using Keynes’ policies to stimulate capitalist economies.

  5. It’s not Mayor Palacios’s fault that the city is obligated to come up with the burden of a $44 million dollar final payment for the tranvia. Unfortunately, it’s an obligation “that we cannot walk away from”. Now and then Cuencanos get reminded of what an expensive mistake that was!

  6. A fiscally conservative politician? How refreshing! Tighten the belt and live within your means is a great idea!

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