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A survey carried out and applied by the Chilean Association of Municipalities (AChM) showed that mayors have had to incur high expenses due to the coronavirus. Masks, sanitation of streets, shelters and rental of electrical equipment are part of them. Facing the pandemic has meant an imbalance in the municipal budget.
The president of the AChM, Fernando Paredes, said that “we are meeting with all the local authorities to see the magnitude of deficits that the municipalities have and the greater expenses that have been involved in facing the coronavirus pandemic.”
Paredes, mayor of Natales, added that “we are working on a proposal with the government and we are waiting soon for a response to a serious problem for Chileans.”
13% only on pandemic issues
On average, the municipalities spent 13% of their monthly budget in April, that is, 43 billion pesos, to face the health emergency. It is estimated that implementing the return of personnel, with all the elements of personal protection (PPE) suggested by the authority, distancing and replacements, could raise that cost up to 20%.
According to the AChM, it is unsustainable for municipalities to maintain this level of spending. For them, in light of the figures, municipalities must refrain from continuing to spend in the emergency as they are. They point out that, in the absence of fresh funds, many municipalities will be obliged to suspend payments for current expenses or services to the community.
Financial difficulties
Due to the financial difficulties of the municipalities, many are making decisions to adjust their 2020 budget (approved in December 2019). This, since no municipal budget contemplates expenses resulting from a health emergency, such as that of the Covid-19.
Faced with this, the AChM consulted the municipalities of all Chile, about the decisions they were taking to face the decrease in income and the explosive increase in expenses. The result is that, with eight months remaining, surely more complex than the previous ones, the budgetary challenges and needs will become incalculable depth.
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