Mexican President Vicente Fox met with governors of 30 of his nation's states on Tuesday to sign a pact on social development. But the gathering was marked by some disagreement over federal cutbacks on payments to the states.
In what was to have been a routine, formal meeting to sign an accord, there was a noticeable amount of disaccord. The program was interrupted unexpectedly by the governor of the southern state of Chiapas, Pablo Salazar, who questioned the president's openness to the governors' views. He and several other governors then raised the question of the recent federal budget cut of more than $1 billion, which has also affected state budgets since they rely almost entirely on federal funds. The governors complained that President Fox had not consulted them before making the cuts.
Governor Lazaro Cardenas Batel, of Michoacan state, says the budget cuts are a real problem for the states. He says Mexican states have great needs that are not being met by the federal funding.
Most of Mexico's public funding comes from federal taxes or money from the state-owned oil company. The federal government collects the funds and then shares them with the 31 states and the Federal District, which comprises Mexico City.
For his part, President Fox says the cuts were not only necessary, but required by law since government income for the first quarter fell below the amount required under the current budget. Mr. Fox says it is only fair that the federal and state governments share this burden. But President Fox also called upon the governors to close ranks with him to present a unified front against the problems faced by Mexico. Mr. Fox also noted that there are clear signs of economic recovery now and that should help the country earn more revenue in the months ahead. The president also pointed out some of the nation's strengths, including a high level of foreign investment, a strong peso currency and an inflation rate holding steady at a little over four percent.
At the meeting Tuesday, Mr. Fox and the governors in attendance signed a development pact that will channel 3.72 million pesos, about $340 million, to combat poverty throughout the country.