15 May 2020 – New law passed that guarantees municipal budget rescue

Type of Intervention: Executive Order
Sectors Involved: Local Government
Level of Jurisdiction: National
Lead People/Agency: Ministry of Economy (leading )
Local Governments (implementing)

Overview: The President of the Republic passed Law No.155, of may 15, 2020; which modifies Law 37 of 2009, that decentralizes public administration and ensures the budgetary rescue of local governments affected by the pandemic to guarantee the employment of more than 12,500 municipal employees.
This is an action aimed at strengthening the administrative capacity of the municipalities to promote their operation during the crisis caused by the COVID-19 pandemic.
During the current fiscal period, the country’s municipalities have seen their revenues decrease due to the pandemic, affecting their operating capacity, so the new law leads to the budget rescue of local governments so that they can cover their basic operating expenses.
The new law empowers municipalities to allocate, to pay salaries, during the year 2020, 100% of the final amount they receive in concept of Property Tax to operation.
In article 1, a transitory paragraph indicates that the municipalities may, during the period of 2020, allocate the total amount they receive from transfers from the Central Government, as Property Tax, to cover their operating expenses. They can use the uncommitted balances for fiscal years 2016, 2017, 2018 and 2019.
The municipalities will distribute, the amount they receive in concept of the Property Tax between the communal boards and the mayors, in proportion to the operating expenses, taking into account the services they provide, the territorial extension and the population density.
Full details here: https://www.gacetaoficial.gob.pa/pdfTemp/29025/GacetaNo_29025_20200515.pdf

Other links: 1
Type of Justification: No justification given