Governors have raised concerns over plans to set aside Sh72.7 billion for issues classified as national interests.
The proposal has Sh13.6 billion listed as NYS re-engineering.
A document seen by the Daily Nation shows that the government has also set aside Sh342 billion to deal with issues under national obligation and another Sh433 billion for settlement of debts.
Council of Governors Chairman Peter Munya has accused National Treasury Cabinet Secretary Henry Rotich of using gimmicks to reduce allocations to counties.
“We never agreed on this during IBEC. A committee was created to deal with this matter but it never met. We were shocked to see Mr Rotich coming up with estimates that relied on these clusters without consulting us,” he said.
He said though there were issues of national interest that deserved an isolated budget, the process of determining the items to be funded must be consultative.
Mr Munya said he had made efforts to meet Mr Rotich to discuss the matter without success.
Issues clustered under national obligations include Sh56 billion for pensions, constitutional salaries and others, Sh204 billion for constitutional commissions, Sh4.9 billion for independent offices, Sh27 billion for Parliament among others.
The proposal also sets aside Sh7.2 billion that includes Sh5 billion for contingencies and Sh2 billion for strategic grain reserves to be removed from national revenue before division is made between the county and national governments.
If the proposal is approved by the National Assembly, then only Sh517 billion will be available for county and national governments.
The counties would take Sh294 billion while the national government would retain Sh223 billion.
Siaya Governor Cornel Rasanga raised the alarm over clustering of certain items under national interests, saying it was meant to reduce the amount of equitable sharable revenue.
“This proposal was presented to us by the deputy president in the last IBEC meeting. But it looks suspicious and many of us do not support it,” said Mr Rasanga.
He said the fund would help the national government take over devolved functions.
Turkana Governor Josphat Nanok said national interests were functions implemented at national and county levels of governance.
“Water and fighting hunger are national interests being implemented by counties, just like security, defence and foreign affairs are for national government. As such, they qualify for pre-sharing deductions. If not, revenues should be shared equitably,” said Mr Nanok.
Bomet Governor Isaac Ruto accused the national government of plotting to reduce county allocations.
“This is a trick hatched to reduce what should go to the counties through the back-door, but governors will reject such moves,” said Mr Ruto.
Under national interests Sh17.7 billion has been set aside to fund the enhancement of security, Sh9 billion to fund national irrigation and fertiliser clearance and Sh13.6 billion to facilitate the National Social Security Safety Net.