Municipality to cut budget by 4.27 percent

Municipality to cut budget by 4.27 percent

JAKARTA (JP): The municipality will cut Rp 144 billion
(US$38.92 million) or 4.27 percent of its Rp 3.369 trillion
budget for the 1997/1998 fiscal year, a city councilor said
yesterday.

Amarullah Asbah, head of Commission C for financial affairs,
told reporters that the cut would be made due to the city's
overprojecting of costs for some projects from last year's
budget.

Amarullah said the city had earlier estimated that some
projects from the previous fiscal year could not be completed as
scheduled and would have to continue into this fiscal year.

"But in fact, all the projects were completed, thereby
enabling the city administration not to set aside additional
funds for them. The previous fiscal year's city budget was
estimated to leave Rp 236 billion unspent. However, after the
review (accounted for the accelerated spending to complete the
projects), the total left was only Rp 136 billion," he said.

Another reason for the planned budget cut is the current
monetary crisis that has forced the city to reevaluate some of
its development projects, Amarullah said.

Deputy Governor of Economic and Development Affairs Tb.M. Rais
said earlier that the budget for the 1997/1998 fiscal year would
be cut by less than 10 percent.

Even though the city is facing tough calls in making decisions
to pick which development projects to start first, Amarullah
said, the city would decide based on an "optimization approach".

"The optimization approach means that the city will go ahead
with the project developments dealing mainly with improvement of
public services.

Unnecessary

Amarullah reiterated the importance of reducing unnecessary
expenses for the sake of budget efficiency.

"The administration, for example, can cut budget for non-
physical projects, such as unnecessary training courses or
comparative studies," he said.

Moreover, if the city wanted to build a health community
center, the building could be constructed first while its fences
could be delayed, he said.

Amarullah also revealed that the administration would still
rely on the collection of local taxes and levies. "The revenues
from local taxes have reached Rp 296 billion this year, compared
to Rp 290 billion collected last year," he said.

"The profits from city-owned companies also jumped from only
Rp 55 billion last year to Rp 61 billion in the first nine months
of this year," he said.

Meanwhile, Lukman Mokoginta, a member of Commission D for
development affairs, told reporters that 72 city projects,
including 22 new projects, were reviewed under the optimalization
scheme.

But Lukman declined to mention the name of the projects:
"Wait for the official announcement from the municipality."

Amarullah also underlined the importance of intensifying tax
and levy collections.

"If the municipality manages to collect all the tax and levy
dues, including those from entertainment centers, the city will
have more funds to continue its development projects," he said.

Rais said earlier that the administration would maintain its
development for its public service projects, including flyovers
and roads. (07)