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CHAPALA, a failed city??


lakeside7

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The Chapala government has had problems for years. Chapala should be one of the richest small towns in Mexico. Every new home that is finished here adds a bundle to the city coffers.  Not many pueblos with that kind of money coming into the budget. 

The city can spend millions on a bridge to Jesus, but can't repair the main street. Re-design in front of the city hall, but can't repair the new lamps placed there. No money to pay the garbage men, the landfill, the maintenance workers.

  But the money came in from many sources, more than enough for all the city's needs. Any guesses where it is?  Maybe there is a disaster account we are not aware of.... Smile

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Hardly a single incident.  More like a chronic condition.  They haven't paid the electric bill for 4 months   Just a few weeks ago the trash pickup stopped because they didn't pay the landfill bill.  

I don't envy the incoming administration.  Probably everything movable has been carted off and the bank accounts emptied.  I also read they are stalling on providing asset summaries to the incoming government.  I hope the new guys team with the incoming reform Jalisco government and fully investigate this outgoing regime and where our money went.

 

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1 hour ago, Mostlylost said:

The Chapala government has had problems for years. Chapala should be one of the richest small towns in Mexico. Every new home that is finished here adds a bundle to the city coffers.  Not many pueblos with that kind of money coming into the budget. 

The city can spend millions on a bridge to Jesus, but can't repair the main street. Re-design in front of the city hall, but can't repair the new lamps placed there. No money to pay the garbage men, the landfill, the maintenance workers.

  But the money came in from many sources, more than enough for all the city's needs. Any guesses where it is?  Maybe there is a disaster account we are not aware of.... Smile

https://www.lavozdelaribera.com.mx/autoriza-cabildo-de-chapala-reestructurar-deuda-municipal/

I don't know where you got the idea the Municipality of Chapala should be rich or it gets a large amount of money when a house is finished - they get peanuts because of the Mexican system of taxes. Property taxes here are used for other costs and it isn't even close to what they are  used for NOB - IVA and SAT taxes are supplied for the things property taxes are used for NOB. Also population according to the Mexican census calculates what IVA and SAT taxes all municipalities get in the yearly budgets. So why would  a few villiages and a town be rich? Do you have inside info. or something unbeknowst to us.

Also Chapala is still 72 million pesos in debt and has being paying it off with interest for 6 years from the monster debt your municipal government racked up 2 adminIstrations ago - your new malecons etc.. I see no reason to think Lakeside is doing that well because of new construction ongoing in any way. The figures don't add up to much money. IMO

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On ‎9‎/‎29‎/‎2018 at 5:28 PM, Mainecoons said:

Hardly a single incident.  More like a chronic condition.  They haven't paid the electric bill for 4 months   Just a few weeks ago the trash pickup stopped because they didn't pay the landfill bill.  

I don't envy the incoming administration.  Probably everything movable has been carted off and the bank accounts emptied.  I also read they are stalling on providing asset summaries to the incoming government.  I hope the new guys team with the incoming reform Jalisco government and fully investigate this outgoing regime and where our money went.

 

As of 9 to 11 years ago the State, Federal and Municipal Controllers are authorized by Federal Law to audit any government that recieves federal tax money - started up about 16 years ago but took a long time to build their empire to do what they are now doing. The way they steal now and before is not empting bank accounts - that is why the upswing of Governors are being caught and in the news - if they do not want to get caught. They hire corrupt contractors who overcharge and get a cut. Budget requests are approved in many segments and a certificate of deposit is issued to a specific bank account and if they screw up and don't pay the proper recpient that  amount it is an irregularity they will have to clarify or the facts will be sent to the Federal PGR. Money is in municipal coffers alright but if it is federal  tax money it is easily trackable. Of course if they have no reason to audit then nobody knows anything. If they do audit you will usually hear about them doing it 2 to 3 years after the incident. That is about how long it takes them to get there.

If they get caught and pay back all or most of the money - cut a deal - they are free to go with a small fine but their seized property stays behind. The exception is La Maestra - she will get back some property because it was private money not federal tax money - the bi**h.

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Just a clarification Alan, it was reported about a year ago that Chapala derives 70 percent of its revenues from property taxes and the official quoted stated this is a much higher percentage than normal.  Probably where you live what you are describing is true but this area has a disproportionate number of large and expensive homes and that is reflected in revenues.  Our property taxes have tripled since we bought and we have done no additional construction only maintenance.  Our friends report similar increases.

About the same time it was also reported the city hall payroll had ballooned 50 percent under the outgoing administration and it was common knowledge around town the place was full of cronies who got laid off in GDL under the reform government there.  Alfaro's positive impact on the GDL government was widely known and was a major reason he won the governor's chair quite solidly.  In fact the MC reform party basically swept Jalisco in that last election.

What would be great here is to get a decent local government for a change and that government remains in office for two terms.  It is going to take at least that long to clean up the mess here.

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I give Mexican friends in Chapala a piece of my mind on how to improve things from time to time. It is an uphill battle but some of them understand and see the underlying problems. Will things ever improve?

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11 hours ago, Mainecoons said:

Just a clarification Alan, it was reported about a year ago that Chapala derives 70 percent of its revenues from property taxes and the official quoted stated this is a much higher percentage than normal.  Probably where you live what you are describing is true but this area has a disproportionate number of large and expensive homes and that is reflected in revenues.  Our property taxes have tripled since we bought and we have done no additional construction only maintenance.  Our friends report similar increases.

About the same time it was also reported the city hall payroll had ballooned 50 percent under the outgoing administration and it was common knowledge around town the place was full of cronies who got laid off in GDL under the reform government there.  Alfaro's positive impact on the GDL government was widely known and was a major reason he won the governor's chair quite solidly.  In fact the MC reform party basically swept Jalisco in that last election.

What would be great here is to get a decent local government for a change and that government remains in office for two terms.  It is going to take at least that long to clean up the mess here.

https://es.m.wikipedia.org/wiki/Chapala_(municipio)

 

https://es.m.wikipedia.org/wiki/Chapala

 

https://es.m.wikipedia.org/wiki/Ajijic

 

https://es.m.wikipedia.org/wiki/Jocotepec

According to Wikipedia the Municipio de Chapala - the whole government zone of Lakeside, called counties NOB, has a total population of 50,738. It appears too small to have a decent amount of federal tax money in the yearly budget to offset all it has compared to many otther municipalities that size. A city in Mexico has to be 105,000 to de considered a city and the town of Chapala only has a population of 21,596, a decent sized small town which is magnificent, old and on the largest lake in Mexico 30 minutes drive from Mexico's second largest city. Ajilic has 10,509 and is a small town or large villiage. Joco the municipio - county - has 46,522.

 All the large homes are not helping recieve federal tax money with such an insignificant population. No wonder property taxes have jumped. It makes sense to me.

Possibly you are understating and unappreciative of what you actually have there compared to all the dumpy municipios I have seen your size or larger. Pot holes - many don't have paved roads in most of the town or county off the main streets and highways. Patzcuaro at 55,298 (5,000 more than Chapala) municipio - county - population is no Chapala municipio - county - . It is dirty and dumpy compared to Lakeside. Simply my observations. I like Lakeside and find it enchanting. My first visit was in 1985. My last visit  was last year again. A very beautiful place!

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I live in Chapala and today I had to drive over to Ixtlahuacán de los Membrillos, 10 mins or so from Chapala, to pick up something at the house of a friend.  It was my first time in Ixtlahuacán, I expected a poor, mostly run down looking, little town.  I was surprised how clean it was and how smooth and well maintained were the streets, compared to what we have in Chapala.  I admit, Ixtlahuacán is very small, but how have they been able to put in so many smoothish, nice streets?  I also recognize that Chapala has been improving inmeansly its infraestrure, roads and the like, in the past couple of years.  But I don't feel that it is where it should be compared to many much more poorer municipios that I have visited in México over the years.  Si Dios quiere, maybe things will improve for us in the coming years!   ¡Ojalá!

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14 hours ago, Mainecoons said:

Just a clarification Alan, it was reported about a year ago that Chapala derives 70 percent of its revenues from property taxes and the official quoted stated this is a much higher percentage than normal.  Probably where you live what you are describing is true but this area has a disproportionate number of large and expensive homes and that is reflected in revenues.  Our property taxes have tripled since we bought and we have done no additional construction only maintenance.  Our friends report similar increases.

About the same time it was also reported the city hall payroll had ballooned 50 percent under the outgoing administration and it was common knowledge around town the place was full of cronies who got laid off in GDL under the reform government there.  Alfaro's positive impact on the GDL government was widely known and was a major reason he won the governor's chair quite solidly.  In fact the MC reform party basically swept Jalisco in that last election.

What would be great here is to get a decent local government for a change and that government remains in office for two terms.  It is going to take at least that long to clean up the mess here.

"...it was stated..."  "...it was reported..."  "...it was also reported..."  "...it was common knowledge..."  Could you please provide links to these reports and and names of actual sources?  Who stated?  Who reported?  While what you wrote might well be true, it also might be a government coverup of the truth.  In my experience, government officials will say just about anything to protect their--umm--interests.  

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I live in Chula Vista. That Frac, like many others here at Lakeside, provide  through homeowner maintenance fees their own street lighting, water, road maintenance and landscaping. In exchange for our property taxes Chapala provides Policing and of course all the other services to be found at City hall like building permits.

I estimate conservatively that Chula Vista residents send over a million pesos a year to the Chapala coffers for essentially no services.

Add to that what the 20 or so other Lakeside Fracs contribute and one indeed wonders why basic street maintenance can't be accomplished.

SunFan

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3 hours ago, SunFan said:

I live in Chula Vista. That Frac, like many others here at Lakeside, provide  through homeowner maintenance fees their own street lighting, water, road maintenance and landscaping. In exchange for our property taxes Chapala provides Policing and of course all the other services to be found at City hall like building permits.

I estimate conservatively that Chula Vista residents send over a million pesos a year to the Chapala coffers for essentially no services.

Add to that what the 20 or so other Lakeside Fracs contribute and one indeed wonders why basic street maintenance can't be accomplished.

SunFan

" Property taxes here are used for other costs and it isn't even close to what they are  used for NOB - IVA and SAT taxes are supplied for the things property taxes are used for NOB. Also population according to the Mexican census calculates what IVA and SAT taxes all municipalities get in the yearly budgets. "

IVA and SAT federal taxes pay for all police in Mexico - the SSP. Sectretaria de Seguridad Publico. They also pay for public schools and more that property taxes pay for NOB. It is a completely different tax system in Mexico with no comparatable tax system NOB. Property taxes are a minor expense  in Mexico for a reason and IVA is 16 percent on almost everything for the same reason. You are paying tiny amounts in property taxes because you pay 16 percent everytime you open your purse and the federal government collects it to pay for what services we have locally in a greater part than were we came from - not that hard to understand but many Expats don't know the many different systems in Mexico or how they operate.

 

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Again Alan, the muncipio itself stated they get 70 percent of their operating funds from the property tax here and it was also noted in the same report that this is much higher than usual for Mexico because they have much higher than usual revenues from this tax locally.  These are the funds that are supposed to be used to pay things like the electric bill and dumping fees.  

Respectfully, I don't think visiting every year or so probably puts one in a situation we they understand the nuances of a locality.  It would be like us trying to tell you how things work in San Luis Potosi.  Nor is it logical to compare this municipio with poverty stricken ones.  It is more accurate to draw comparisons between here and places like Tapalpa and Mazamitla, both heavily touristed and also both having a lot of up market real estate.

And both are spotless and well maintained.  I just got back from a moto ride to Mazamitla this morning and it was packed with people with nary a scrap of trash or pothole to be seen anywhere.  Muncipal employees were out on the plaza and surrounding streets sweeping and cleaning on a Sunday.

Ajijic became trashier and more run down than ever under the outgoing government that couldn't seem to provide basic services or pay its bills.  Thankfully the Mexican community rose up and tossed it out voting more than 2:1 for anyone but the current administration.  That should tell you something.

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I, like many of us, am fairly certain where the money went. There's no good excuse why our streets are so full of potholes, or why the garbage piled up, or why the benches on the Ajijic Malecon are missing boards, or why the wooden bridges there are decrepit and dangerous and the playground equipment is in disrepair, to just name a few things that are substandard in what some had the effrontery to propose as a "Puebla Magica".  The "magic" was in disappearing the money other towns find to keep up their substructure.

There was a good reason why the people voted as they did.🤑

 

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1 hour ago, AlanMexicali said:

" Property taxes here are used for other costs and it isn't even close to what they are  used for NOB - IVA and SAT taxes are supplied for the things property taxes are used for NOB. Also population according to the Mexican census calculates what IVA and SAT taxes all municipalities get in the yearly budgets. "

IVA and SAT federal taxes pay for all police in Mexico - the SSP. Sectretaria de Seguro Publico. They also pay for public schools and more that property taxes pay for NOB. It is a completely different tax system in Mexico with no comparatable tax system NOB. Property taxes are a minor expense  in Mexico for a reason and IVA is 16 percent on almost everything for the same reason. You are paying tiny amounts in property taxes because you pay 16 percent everytime you open your purse and the federal government collects it to pay for what services we have locally in a greater part than were we came from - not that hard to understand but many Expats don't know the many different systems in Mexico or how they operate.

 

IVA appears to be optional in many places some even request the extra 16% if you ask for a factura. 

How many renters are given a factura for the rent?

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3 hours ago, ibbocat said:

IVA appears to be optional in many places some even request the extra 16% if you ask for a factura. 

How many renters are given a factura for the rent?

Rents paid from residential rentals are only obligated to pay the 16% IVA if the rental is furnished otherwise no IVA is due but it should be declared on yearly income taxes as revenue. It is illegal not to charge IVA and pay it to SAT and if many do it is their problem not the purchasers problem even if a SAT factura is not requested or any reciept is given or not it doesn´t matter. Anyone purchasing things or paying commercial property rent without  a SAT online generated factura cannot deduct it on their yearly income tax form as an operating expense. SAT can go into anyone's or any companies' bank/s account/s without a judge´s order on a whim. Many savy business owners are very wary of this.

Example: Coca Cola generates SAT facturas and will not bypass this for anyone when dropping off product at the local tiendas. If they somehow end up auditing the tienda and the X amout of Coca Cola products sold to them doesn´t show them paying at least that amount of IVA taxes plus IVA on other products sold there they are in trouble.

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1 hour ago, AlanMexicali said:

Rents paid from residential rentals are only obligated to pay the 16% IVA if the rental is furnished otherwise no IVA is due but it should be declared on yearly income taxes as revenue. It is illegal not to charge IVA and pay it to SAT and if many do it is their problem not the purchasers problem even if a SAT factura is not requested or any reciept is given or not it doesn´t matter. Anyone purchasing things or paying commercial property rent without  a SAT online generated factura cannot deduct it on their yearly income tax form as an operating expense. SAT can go into anyone's or any companies' bank/s account/s without a judge´s order on a whim. Many savy business owners are very wary of this.

Example: Coca Cola generates SAT facturas and will not bypass this for anyone when dropping off product at the local tiendas. If they somehow end up auditing the tienda and the X amout of Coca Cola products sold to them doesn´t show them paying at least that amount of IVA taxes plus IVA on other products sold there they are in trouble.

You assume property owners declare rental income.

Very few properties are let unfurnished.

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1 hour ago, AlanMexicali said:

Rents paid from residential rentals are only obligated to pay the 16% IVA if the rental is furnished otherwise no IVA is due but it should be declared on yearly income taxes as revenue. It is illegal not to charge IVA and pay it to SAT and if many do it is their problem not the purchasers problem even if a SAT factura is not requested or any reciept is given or not it doesn´t matter. Anyone purchasing things or paying commercial property rent without  a SAT online generated factura cannot deduct it on their yearly income tax form as an operating expense. SAT can go into anyone's or any companies' bank/s account without a judge´s order on a whim. Many savy business owners are very wary of this.

Example: Coca Cola generates SAT facturas and will not bypass this for anyone when dropping off product at the local tiendas. If they somehow end up auditing the tienda and the X amout of Coca Cola products sold to them doesn´t show them paying at least that amount of IVA taxes plus IVA on other products sold there they are in trouble.

So are you saying that here in Mexico, there is a Socialistic distribution of tax monies, where NOB each entity (local) does their own taxes to provide the vast majority of local services?

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9 hours ago, Jim Bowie said:

So are you saying that here in Mexico, there is a Socialistic distribution of tax monies, where NOB each entity (local) does their own taxes to provide the vast majority of local services?

Not the same distribution system as the US.

 State governments collect state income tax and all but 2 states, if I remember correctly  - Texas and Nevada - collect about 8 percent sales tax in the US. In Mexico states collect no sales tax or income tax. The federal government in Mexico collects sales tax and income tax and distributes it for federal, state and local services such as police, public schools, roads, highways and infrastructure etc.. This is why property taxes are very low. This is why property taxes in the US and Canada are very high. This is why sales tax in Mexico is high. Socialized medicine and free state university to students with the highest grades on entrance exams takes high taxes to support. Very low average wages boost the economy same as any where else. Obrador mentioned he wants to double minimum wage and half the IVA tax to 8 percent. If he halves the IVA they will need to fill the gap some how. Boost income taxes on the higher wage earners up considerably? Cut social and infrastructure programs? Boost corporate taxes up considerably? Screw up everything which is doing well now?

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1 hour ago, AlanMexicali said:

Not the same distribution system as the US.

 State governments collect state income tax and all but 2 states, if I remember correctly  - Texas and Nevada - collect about 8 percent sales tax in the US. In Mexico states collect no sales tax or income tax. The federal government in Mexico collects sales tax and income tax and distributes it for federal, state and local services such as police, public schools, roads, highways and infrastructure etc.. This is why property taxes are very low. This is why property taxes in the US and Canada are very high. This is why sales tax in Mexico is high. Socialized medicine takes high taxes to support. Very low average wages boost the economy same as any where else. Obrador mentioned he wants to double minimum wage and half the IVA tax to 8 percent. If he halves the IVA they will need to fill the gap some how. Boost income taxes on the higher wage earners up considerably? Cut social and infrastructure programs? Boost corporate taxes up considerably? Screw up everything which is doing well now?

Alan can you please elaborate "SCREW UP EVERYTHING WHICH IS DOING WELL  NOW"

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56 minutes ago, lakeside7 said:

Alan can you please elaborate "SCREW UP EVERYTHING WHICH IS DOING WELL  NOW"

https://tradingeconomics.com/mexico/sales-tax-rate

Look at the federal VAT sales tax rates of social democracies World wide. 16 percent is not the highest rate. 

If Obrador goes ahead and makes the VAT ( value added tax) rate 8 percent I was simply speculating what might happen when this giant share of money is gone and where will it then come from. The income tax rates in Mexico are already high.

 

Mexico Taxes Last Previous Highest Lowest Unit  
Corporate Tax Rate 30.00 30.00 42.00 28.00 percent [+]
Personal Income Tax Rate 35.00 35.00 35.00 28.00 percent [+]
Sales Tax Rate 16.00 16.00 16.00 15.00 percent [+]
Social Security Rate 9.23 9.23 17.63 0.00 percent [+]
Social Security Rate For Companies 7.58 7.58 14.70 7.58 percent [+]

Social Security Rate For Employees

 

VAT TAX RATES:

1.65 1.65
Country Last  
Italy 22.00 Dec/18  
Argentina 21.00 Dec/18  
Netherlands 21.00 Dec/18  
Spain 21.00 Dec/18  
Euro Area 20.80 Dec/18  
France 20.00 Dec/18  
United Kingdom 20.00 Dec/18  
Germany 19.00 Dec/18"
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15 hours ago, SunFan said:

I live in Chula Vista. That Frac, like many others here at Lakeside, provide  through homeowner maintenance fees their own street lighting, water, road maintenance and landscaping. In exchange for our property taxes Chapala provides Policing and of course all the other services to be found at City hall like building permits.

I estimate conservatively that Chula Vista residents send over a million pesos a year to the Chapala coffers for essentially no services.

Add to that what the 20 or so other Lakeside Fracs contribute and one indeed wonders why basic street maintenance can't be accomplished.

SunFan

You are only paying for services inside your complex with maintence - HOA fees but everytime you drive out the gate you are using services provided, in part, by your property taxes. Example: traffic lights,  streets and pothole repair where aplicable, the malecón you walk on, the festivals paid for by the Chapala municipality, and anything else you use supplied locally that your property taxes help support.

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18 hours ago, Mainecoons said:

Again Alan, the muncipio itself stated they get 70 percent of their operating funds from the property tax here and it was also noted in the same report that this is much higher than usual for Mexico because they have much higher than usual revenues from this tax locally.  These are the funds that are supposed to be used to pay things like the electric bill and dumping fees.  

Respectfully, I don't think visiting every year or so probably puts one in a situation we they understand the nuances of a locality.  It would be like us trying to tell you how things work in San Luis Potosi.  Nor is it logical to compare this municipio with poverty stricken ones.  It is more accurate to draw comparisons between here and places like Tapalpa and Mazamitla, both heavily touristed and also both having a lot of up market real estate.

And both are spotless and well maintained.  I just got back from a moto ride to Mazamitla this morning and it was packed with people with nary a scrap of trash or pothole to be seen anywhere.  Muncipal employees were out on the plaza and surrounding streets sweeping and cleaning on a Sunday.

Ajijic became trashier and more run down than ever under the outgoing government that couldn't seem to provide basic services or pay its bills.  Thankfully the Mexican community rose up and tossed it out voting more than 2:1 for anyone but the current administration.  That should tell you something.

What tells me something is "the municipio itself stated...".   As I wrote upthread, "While what you wrote might well be true, it also might be a government coverup of the truth.  In my experience, government officials will say just about anything to protect their--umm--interests."  If you truly believe that what "the municipio itself stated..." is the unvarnished truth, I have a bridge in Brooklyn...

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Why would they fabricate this?  Puts them in the position of having to explain their failures despite having a lot more property tax revenue than most municipios.   As I understand it this figure came out when opponents started looking at revenues sources and asking where all this money was going.

I know you have traveled Mexico a lot as have I.  There are very few localities with the concentration of high dollar real estate this area has  It makes sense.

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