Tuesday, December 29, 2009

Juarez Municipal Budget Compared with El Paso and Albuquerque

The City Council of Cd. Juárez yesterday approved the budget for 2010 at $3 billion 175,000 Pesos, which, at an exchange rate of 13 to the dollar would be about $231 million in U.S. dollars. This is for a population of about 1.5 million persons.

By comprison El Paso County, Texas, with a population of about 760,000, has a combined budget (for the city and county, the equivalent of the Municipio de Cd. Juárez) of $936.57 million for 2010, more than four times as much for an area with half the population.

Bernalillo County, with a population of about 635,000, has a budget of about $1.26 billion (US) if you combine the budgets of the city ($904.3 million) with the county ($354.24 million), for 2010, well over 5 times as much for a population only 42% as large. Notice that the Albuquerque budget, combining city and county, is significantly higher than the combined budget of city and county in El Paso, reflecting a much wealthier community.

Calculating the difference in budgets using the official exchange rate, however, exaggerates the gap between the cities, since the Mexican Peso in purchasing power is higher (given lower wage rates, costs of living, etc.) than implied by the exchange rate. To adjust for this several global agencies, such as the World Bank and IMF, calculate what they call a Purchasing Power Parity (PPP) index for each country, taking costs of living into account. For Mexico the IMF estimates per capita income at PPP to be $13,541 for 2009, compared to an exchange rate-derived per capita income of $10,200 (2008), a 33% adjustment upwards from the exchange rate.

Adjusting the Cd. Juárez upwards by 33% to give a more accurate picture of the purchasing power $231 million will buy there, generates a PPP estimate of $307.23 million ($US), still leaving a significant gap; El Paso county governments can purchase about 3 times as much stuff than Cd. Juárez. And Bernalillo county and city governments can purchase about four times as much.

Yesterday the city council agreed it would cost Cd. Juárez about $17 million pesos to keep the troops in town from January 1 through March. This amounts to about 2.27% of what the city will spend during those three months. The council justified the added expenditure on the grounds that the newly trained city police are "not yet ready" to take control of the city.

No comments: