Strengthening Subnational Governments’ Capacities: A Focus on Revenue Generation and Efficient Public Spending

Web Editor

November 7, 2025

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Introduction

In recent years, mayors and governors have abandoned lobbying efforts in San Lázaro for budgetary allocations. The amounts of programs and their allocation within the budget categories have been decided in Palacio Nacional without exception, sometimes with noticeable errors.

Political Clarity and the Methods of the Fourth Transformation

Among all political signs, mayors and governors have a clear understanding of the methods employed by the Fourth Transformation. It’s no longer just about republican austerity or fair moderation (reflected in the salary cap for middle and upper management) but finding formulas to generate revenue and redirect spending towards the most pressing sectors.

Nuevo León serves as a national example in predial taxation. Some municipalities with undeniable tourism vocations—Bahía de Banderas in Nayarit, Los Cabos in southern Baja California, or the conurbation around Cancún—could efficiently digitize their property registries.

The old model, applied during the Mancerista era in Mexico City or the Echeverria administrations in the Guadalajara metropolitan area, relied on three-dimensional cartography to update foreign companies’ databases. However, this did not necessarily translate into more resources for the municipalities.

Mobility, now recognized as a potential income source for local treasuries, has been successful in models like Cablebus and BTL networks or regional trains. This model has been adopted in major cities like Monterrey and Guadalajara, but in Mexico City, there’s reluctance to increase SCT Metro fares.

Strengthening Subnational Governments’ Capacities

With the Presupuesto de Egresos de la Federación for 2026 defined, federal and local legislators along with state financial authorities are focusing on options to bolster subnational governments’ capabilities and their public finances.

  • Imposing Tax Analysis: Examine vehicle taxes and digitize property and multi-purpose catastrophic registries.
  • Accelerated Public Investment: Emphasize high-impact social and economic projects.
  • Sustainability Integration: Incorporate sustainability criteria into state and municipal public investments.
  • Capacity Strengthening: Enhance planning, evaluation, financing, and execution of investment projects.

The multi-purpose catastrophic system is an integrated geospatial, legal, economic, environmental, and social information system for properties. It goes beyond tax purposes, including databases on land ownership, physical characteristics, economic valuation, zoning, and socioeconomic and environmental data. It also facilitates rural land management by providing crucial information for public policy formulation.

Secondary Effects

ADVISORIES:

The stage is set: the Amodio family has agreed to facilitate the Santa Fe expo, where the digital and technology industry will gather on Wednesday, 12th, with high-level government exhibitors—including the Secretary of Economy, Marcelo Ebrard, and Nuevo León Governor Samuel García—along with Google, Axtel, Meta, Kio Networks, Lenovo, and Digevo executives. José Antonio Peña Merino, head of the Digital Transformation Agency, has not responded to the invitation.

COSTS:

Flooding in Veracruz’s Huasteca region affected 457 schools, with 111 suffering severe damage. The reconstruction of educational and healthcare infrastructure will be the federal government’s responsibility, while the state administration led by Rocío Nahle has requested the Veracruz Congress for an extraordinary budget—estimated at 10,000 million pesos—to begin rescuing infrastructure in the north and Huasteca regions.