Monterrey is the third most indebted municipality in Mexico. Monterrey is the third most indebted municipality in Mexico.

Municipal debt has tripled in 10 years

The total was over 50 billion pesos by the end of the third quarter of 2017

Municipal debt in Mexico has more than tripled over the past 10 years, according to a federal government report, and eight municipalities are in arrears for more than a billion pesos each.

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The total public debt across all of the country’s municipalities reached 51.67 billion pesos (US $2.6 billion) at the end of the third quarter of 2017, 3.5 times more than the 14.55 billion pesos (US $747 million) owed at the end of the same period in 2007.

Some of Mexico’s biggest and best-known cities are among the worst offenders.

Heading the list is the northern border city of Tijuana, Baja California, which had a debt of almost 2.7 billion pesos (US $137.7 million).

Next is the nation’s second largest city, Guadalajara, Jalisco, which owed close to 2.2 billion pesos.

In third place is the commercial and industrial powerhouse of Monterrey, Nuevo León, which was indebted to the tune of 1.97 billion pesos.

The other five municipalities that owed more than a billion pesos each are Sonora’s state capital, Hermosillo (1.8 billion), Guanajuato’s largest city, León (almost 1.3 billion), Quintana Roo tourism hub Benito Juárez-Cancún (almost 1.2 billion), Mexicali, Baja California (1.06 billion) and Zapopan, Jalisco (1.03 billion).

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An analysis carried out by the Chamber of Deputies Public Finances Study Center identified the indebted municipalities.

Its report, “Financial Obligations of the Municipalities of Mexico at the Third Quarter of 2017,” also determined which municipalities have the largest debts on a per-capita basis.

It found that 14 local government areas had debts which exceeded 1,000 pesos (US $51) per person.

The Quintana Roo municipality of Solidaridad — whose municipal seat is Playa del Carmen — had the largest debt in Mexico according to its population, owing 3,284 pesos (US $168) per person.

Nogales, Sonora (2,316 pesos per capita), Nuevo Laredo, Tamaulipas (2,060 pesos), Hermosillo, Sonora (2,054 pesos) and Nicolás de los Garza, Nuevo León (1,933 pesos) followed.

The report said that at the end of the third quarter of last year, 707 municipalities across Mexico reported debts to the Finance Secretariat as required by law.

According to that figure, 29% of Mexico’s 2,446 municipalities were carrying some level of debt at the end of September 2017.

Source: Milenio (sp)

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  • Mike S

    This is what happens in countries where taxes are very low and not collected. Politicians with their hands in the cookie jar does help either. No taxes- poor schools followed by poor economy. The wealthy don’t care.

    • Ge0ffrey

      Put down your Karl Marx and find some place to volunteer.

      • Mike S

        I doubt if you really know much about Karl Marx other than what barely high school graduates Hannity and Limbaugh have told you. Karl Marx was a philosopher, economist, historian, political theorist, sociologist, journalist and revolutionary socialist. He was an astute observer of of the horrors of industrializing England. He has had more influence on moral economic thinking in the world than anybody else. He did not foresee unionization or work place laws passed in democratic societies as a way for workers to protect themselves from the exploits of English plutocracy and aristocracy. The Soviets of course grossly distorted his economic philosophy and left democracy behind. You have to understand the man in the context of the times and the rapid industrialization that was occurring. He was reviled in America mostly because he was a Jew and an atheist.

        Compare Western Europe to Mexico. One is First World, the other 3rd World. There are many reasons for this and the 2 that stand out are low taxes in Mx and corruption. Mx is a cash society and property taxes, sales taxes, income taxes are almost nonexistent. Property taxes are what fund the public school system in the US. The heavy VAT tax favors the wealthy and hurts the middle class. Corporate taxes in Mx are 30% but it’s always the loop holes that tell the real rate. Personal income taxes are lower in Mx than the US. For a full discussion go to:

        http://www.procopio.com/userfiles/file/user/6850.pdf

        Again, Mexico is a mostly cash society so few taxes are collected.

  • cooncats

    Wrong again Mike:

    http://www.businessinsider.com/wef-27-countries-with-the-highest-tax-rates-in-the-world-2016-2

    Try talking to someone who is on salary and you find out just how high taxes are here. It is true that Mexicans are masters of tax evasion and there’s a really good reason for it. Not only are rates other than property tax very high but the system is regressive as heck. One of the most graphic examples is the VAT at 16 percent charged on things like rent. It seems that Mexican politicians like American liberals just can’t quite grasp that in the end the little guy gets slammed by high income and sales taxes.

    No, this is what happens in countries where there is wholesale theft and mismanagement of taxes. Amazing you can follow this site and somehow missed the endless reports of millions and billions of pesos stolen by the political class.

    Giving governments like they have in Mexico more money just results in more graft. Wise up.

    • LosOjosRojos

      I guess some do think a 16% VAT is regressive but I wonder just how much of that 16% actually makes its way into the treasury. In 12 years I have not heard any Mexican complain about the 16% VAT. (except when they started taxing pet food).

      • cooncats

        I wonder how many know it is even there given it is built into the price of everything. “Some” definitely consider it regressive, try a little reading on the topic. All general sales taxes are regressive because the less well off end up paying a much higher effective rate of taxation than the rich. Interestingly, those socialist Scandinavian countries that liberals like Mike love have been shown to have highly regressive tax systems. Several references on this topic go into quite the detail on this.

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