**Jalisco Governor Proposes Fiscal Pact Reform Ahead of Exit**
As he approaches the end of his term, the Governor of Jalisco, Enrique Alfaro Ramírez, announced plans for a notable fiscal reform. During his final State of the Union address on November 6, 2024, Alfaro declared his intention to introduce legislation aimed at withdrawing Jalisco from the Federal Fiscal Pact, an agreement that has gone unexamined for 44 years. The Fiscal Pact is an agreement between the federal government and the states regarding the distribution of tax revenues.
Alfaro claimed that Jalisco needs to have a fairer share of resources, highlighting the state’s contributions versus what it receives in return. He emphasized that by pulling out of the current system, Jalisco could venture into developing a better financial future for the state and Mexico as a whole. Speaking before an audience of approximately 6,000, including political figures like former Movimiento Ciudadano presidential candidate Jorge Álvarez Máynez, the governor underscored Jalisco’s independence and its track record of advocating for its rights.
The governor recalled previous instances where he opposed federal policies that he deemed unfair to Jalisco, such as resistance to the creation of “superdelegates” and the struggles over national budget allocations. Alfaro also mentioned his decision to work independently on the COVID-19 response in collaboration with local experts and institutions, as well as Jalisco’s departure from the National Governors’ Conference over disagreements with federal oversight.
In late 2021, Alfaro had sought a public vote to gauge residents’ interest in reevaluating the state’s participation in the Fiscal Pact every six years. However, the initiative fell short of the required threshold for legislative action.
The basis of the Fiscal Pact involves the federal government collecting taxes like the Value Added Tax (IVA) and redistributing the revenue to states. Jalisco argues the current redistribution formula is inequitable, with the state receiving back just two pesos for every ten contributed.
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**Secondary Article: Jalisco’s Push for Fiscal Autonomy Sparks National Debate**
In light of Enrique Alfaro’s recent announcement, the discussion around Jalisco’s share of federal tax revenues has reignited national conversations on fiscal decentralization. Other states grappling with similar issues are closely watching Jalisco’s bold move, which potentially sets a precedent for renegotiating fiscal arrangements.
Political analysts suggest that while the move reflects genuine grievances about financial disparities among states, it also involves significant political undercurrents. Critics argue that such unilateral moves could compromise national unity, especially in balancing wealthier states with less affluent regions.
Meanwhile, supporters claim that reevaluating the Fiscal Pact is crucial in an era where regional disparities continue to widen, with wealthier states like Jalisco seeking more autonomy to manage their economic trajectories effectively.
As this debate unfolds, the need for a comprehensive review of fiscal policies that balance state needs with national cohesion has become increasingly evident. Observers anticipate that the ensuing discussions will be pivotal in reshaping Mexico’s fiscal landscape, potentially instigating broader economic reforms.