Governors and the national government are locked in a stalemate over reduction of funds to the counties by three per cent.
Council of Governors chairman Peter Munya has questioned the rationale for reducing the budget from 33 per cent to 30 per cent in the 2016/17 financial year.
“Since the onset of devolution, the amount allocated to counties has never been reduced and we are concerned it has been cut at a time revenue is increasing,” he said.
The inter-governmental Budget and Economic Council chaired by Deputy President William Ruto and a meeting with the governors chaired by President Uhuru Kenyatta failed to resolve the issue, according to Mr Munya.
A committee comprising Treasury Cabinet Secretary Henry Rotich, representatives of governors, Commission on Revenue Allocation and Controller of Budget, was set up on the recommendation of the President to try and unlock the impasse.
Mr Munya, who was appearing before a joint Health and Transport committee of the Senate said the special committee was unlikely to find a solution since the estimates of funds that the counties will get had been tabled in Parliament.
Last week, the Division of Revenue Bill proposed that Sh302 billion be allocated to the counties, an increase from Sh294 billion last year.
It was not clear if the reduction was due to a projected increase in revenue collection.
The Budget Policy Statement has also been tabled in the House by the Treasury and is set to be debated by MPs.
HEALTH AND ROAD ISSUES
Mr Munya, who was with four other governors, lamented the continued withholding of a large share of the health budget.
He said despite over 90 per cent of the functions being devolved to the counties, the ministry held on to over 50 per cent of the budget.
The governors also said they wanted donor money, which accounts for a large proportion of funding to the health ministry, to be sent to the counties directly.
There has also been acrimony over the withholding of funds to build 39,449 additional kilometres of devolved roads.
Another bone of contention was the re-classification of roads which has seen MPs revert to government maintenance of roads that had been devolved to the counties by the Senate and a High Court.
The governors also want 37 percent of fuel levy meant for road maintenance sent directly to the counties for repairs.
However Senator Zipporah Kittony, who chaired the joint committee, said the governors would be unable to handle road construction.
However, the governors said they could do a better job than the Kenya Urban Roads Authority and Kenya Rural Roads Authority that they claimed were the epitome of incompetence yet had a combined Sh50 billion the governors are fighting for.