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Sunday, Jan. 13, 2013

Tijuana is second-most indebted municipality in Mexico; Guadalajara owes the most

       Tijuana has the second-highest debt of Mexico's municipalities, according to Mexico's Finance Ministry. Tijuana owes 2.537 billion pesos, or U.S. $200 million, Frontera newspaper reported. Guadalajara had a debt of 2.67 billion pesos, or $211 million. The municipality with the eighth-highest debt was Mexicali with 948 million pesos, or $75 million.
Story, Frontera (PDF). Second page, Frontera (PDF).
See table below.

       Municipal and state debt has become a major issue in Mexico. Jalisco state, of which Guadalajara is the capital, recently had its debt rating downgraded from A+ to D- by Fitch after the new Institutional Revolutionary Party-run government refused to assume the payments on a $1.4 billion ($110 million) peso loan taken out by National Action Party Gov. Emilio González Márquez in holding the Pan-American Games in 2011. Story, Guadalajara Reporter. Zapopan, which is near Guadalajara, had the fourth-highest debt at the equivalent of $115 million.
Update, Jan. 17: Tax attorney Adolfo Solís Farías told Tijuana's Madrugadores group Thursday that he thinks Jalisco's defaulting is a ploy to get federal help for the state. He said Guadalajara's debt is as big as it is because it borrowed for needed huge public works projects but then spent too much of the loan money on operating expenses, such as salaries.

       Tijuana Mayor Carlos Bustamante blamed Tijuana's high debt on previous PAN administrations. Former PAN Mayor Jorge Ramos (2007-2010) last month publicly defended himself against mismanagement charges.
Update, Jan. 15: Bustamante says the debt is manageable; he previously received a national mayoral magazine's award in part for his restructuring of Tijuana's debt. Story, El Mexicano (PDF).
Update, Jan. 18: Bustamante was in Mexico City this week seeking funding, Frontera reported, and missed San Diego Mayor Bob Filner's state-of-the-city address as well as the 61st anniversary celebration of Baja California statehood. Political page, Frontera (PDF).

      Former PRI Mayor Jorge Hank Rhon (2004-2007) also helped contribute to Tijuana's debt by contracting with Global Corp. to do electronic speeding ticketing. The city now is involved in litigation with Global Corp. over abandoning the contract; Global Corp. wants to be able to recoup past fines that never were collected, among other things.

Dec. 23 story, El Mexicano, in which Tijuana finance chief Rufo Ibarra says city has offered Global Corp. 150 million pesos (nearly $12 million) to put an end to the litigation over the contract.
Dec. 21 story in advance of Dec. 22 council meeting, El Mexicano.
Sept. 4, 2012 story on Tijuana debt with Global Corp.
Feb. 23, 2012 story on Tijuana debt with Global Corp.
Oct 4, 2011 story on Tijuana debt with Global Corp.    

Update, Jan. 16: Finance Minister Luis Videgaray says Mexico does not have the money to rescue debt-strapped municipalities. Story in Frontera (PDF).


Municipality Debt in millions of pesos Debt in millions of dollars
Guadalajara 2,671.6 $211
Tijuana 2,537.3 $200.6
Monterrey 2,128.7 $168
Zapopan 1,457.9 $115
Benito Juárez 1,359.4 $107.5
Nuevo Laredo 1,098.2  $87
León 1,001  $79
Mexicali 948.4  $75




Tax attorney Adolfo Solís Farias's webpage (PDF).