Financial Strength, Yet Deteriorating Public Services and Security
The advance trimester report on Mexico City’s finances for the first nine months of the year highlights the strength of its income. It emphasizes the collection of property and payroll taxes, which increased by 18.3% and 28.3%, respectively, in real terms annually. Non-tax revenues also grew by 14.7%.
Indeed, the increase in tax revenues was very significant, as the entity’s GDP growth should have been only 2.5%. Among non-tax revenues, the standout growth was in traffic fines (36.1%) and “other unspecified” sources (147%).
During the same period, Mexico City’s programmable public expenditure (excluding debt interest payments) fell by 9.8% in real terms compared to the previous year, with investment dropping by 55%. In functional terms, notable increases were seen in public security (10%) and health (4.4%), while education (-29%), housing and services (-20%), environmental protection (-9%), and transportation (-29%) experienced reductions.
The fiscal result through the third quarter shows an 8% real reduction in Mexico City’s debt compared to the end of 2024. While this could be considered positive, it is not excessive (less than 3% of GDP).
Efficient Collection, Yet Unclear Resource Allocation
The treasury’s income reflects efficiency in collecting contributions, which is valuable in itself. Taxpayers paid the property and salary taxes in greater proportion to their economic activity, along with substantial traffic fines. However, the question remains: where are these resources being directed?
Mexico City suffers from deplorable infrastructure, with longstanding neglect: poor street maintenance, countless potholes and low-quality repairs, dilapidated sidewalks, metro failures, water system deficiencies, a poorly maintained airport, and inefficient waste collection, among many other issues. Despite government denials and attempts to divert citizens’ attention, the neglect and deterioration are evident.
Furthermore, there are clear deficiencies in services and surveillance, leading to widespread illegality. A few years ago, the Mexico City government (under Sheinbaum) announced an integral program to improve transportation, but insecurity persists and worsens. Hundreds of microbuses disregard traffic laws, stop wherever passengers are needed, lack proper front and rear lighting, have “chalanes” or runners collecting fares, and harbor numerous thefts. Motorcyclists disregard regulations and traffic signals. Pedestrian safety is precarious, and metro accidents and incidents continue. Illegal street trucking is commonplace.
In many areas, the authorities have virtually ceded control to those who issue fines, neglecting parking regulations when not present, as well as traffic order and safety at important street crossings.
Growing Concerns Over Public Safety and Legality
Although fewer homicides are reported compared to the past, they have been replaced by disappearances, and extortion remains widespread.
Key Questions and Answers
- Q: What does the financial report indicate about Mexico City’s situation? The report highlights the strength of Mexico City’s income, with significant increases in property and payroll taxes as well as non-tax revenues like traffic fines. However, public expenditure has decreased in several areas, including investment and education.
- Q: How are the collected taxes being used? Despite efficient collection, there is visible neglect in public services and security. Infrastructure deterioration, poor street maintenance, and widespread illegal activities are evident across the city.
- Q: What are the concerns regarding public safety and legality in Mexico City? Although homicide rates have decreased, there has been an increase in disappearances. Extortion remains a significant problem, and traffic law violations, pedestrian safety issues, and informal activities in public spaces persist.
