The Council of Governors (CoG) has questioned the neutrality of the Commission on Revenue Allocation (CRA), accusing it of favouring the National Treasury after both institutions recommended Sh440.8 billion as shareable revenue for counties in the 2027/2028 financial year.
The governors argue that the commission has failed to adequately consider their proposals, raising concerns over its independence at a time when counties are pushing for increased funding to meet rising operational costs and emerging financial obligations.
The CRA has recommended Sh440.8 billion in shareable revenue for counties, alongside an additional Sh10 billion for the Equalisation Fund targeting marginalised areas.
However, the Council of Governors maintains that the proposed allocation falls short of counties’ financial needs, insisting that the current economic realities require a substantial increase in funding.
Speaking during an engagement on the vertical sharing of revenue on Wednesday morning, the governors also questioned the commission’s consultation process, noting that it had engaged the National Assembly and Senate before meeting county leaders.
The CoG argued that governors should have been consulted first to enable the CRA to fully understand county-level financial demands before presenting its recommendations to Parliament.
According to the Council of Governors, the Sh428 billion allocated to counties in the previous financial year should be increased by at least Sh100 billion to cater for inflation, rising operational costs and salary adjustments for county employees.
Among the key demands is Sh8.6 billion to pay Universal Health Coverage staff who have been absorbed into county governments and issued with permanent and pensionable employment letters.
The governors are also seeking an additional Sh2 billion to implement collective bargaining agreements for health workers, including allowances, warning that failure to address these obligations could trigger industrial unrest during the electioneering period.
A further Sh21 billion has been proposed to cater for salary increments recommended by the Salaries and Remuneration Commission (SRC) for county employees.
The CoG has described the salary adjustment as non-negotiable, warning that failure to provide the necessary resources could strain county finances.
Both the CRA and county governments have also raised concerns over the SRC’s approach to salary adjustments, accusing the commission of making decisions without adequate consultation with the affected institutions.
The governors are demanding Sh65.97 billion to finance functions transferred to county governments following a resolution of the summit, arguing that the corresponding resources remain with national government ministries.
According to the CoG, the transfer of responsibilities without the accompanying funds has created a funding gap, with ministries allegedly maintaining control of resources despite insisting that the functions have been devolved.
The Council says the issue has remained unresolved, with responsibility for the funding shortfall repeatedly shifting between the national and county governments.
Additionally, the governors have proposed Sh10 billion to cater for transitional costs across the 47 counties as the country enters the electioneering period.
They have also called for an additional Sh30 billion to account for adjustments in revenue costs, following the CRA’s projection of a five per cent increase in revenue collection.
In its defence, the CRA maintained that revenue projections do not always translate into actual collections, noting that the figures frequently fall short of their targets and are subsequently revised.
The commission’s position underscores the challenge of balancing counties’ growing expenditure demands against the revenue available for distribution between the two levels of government.
However, the Council of Governors insists that counties cannot continue bearing the burden of funding shortfalls and additional responsibilities while relying on the CRA to provide an independent assessment of their financial needs.
The dispute is likely to intensify discussions over the division of nationally raised revenue for the 2027/2028 financial year, with county leaders pushing for a larger allocation to sustain service delivery, meet wage obligations and finance devolved functions.
