The Local Government Code allocated shares in revenue collections to local government units (LGUs) in the following manner: 23% for the provinces, 23% for the Cities, 34% for the Municipalities, and 20% for the Barangays. In 2023, the proposed General Appropriations Act (GAA) provided a different distribution scheme of revenue collections to LGUs, to wit: 25% for the provinces, 25% for the Cities, 35% for the Municipalities, and 15% for the Barangays. Congressman Macky assailed the constitutionality of this item in the proposed GAA. The House of Representatives Budget Committee countered that it is within the power of Congress to enact laws to increase or decrease the just share of the LGUs in the revenues. Is the new distribution scheme in the proposed GAA lawful? Explain.
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No, the new distribution scheme in the proposed General Appropriations Act (GAA) is not lawful. Under Article VI, Section 25(2) of the Constitution, no provision shall be embraced in the general appropriations bill unless it relates
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Quick check
Is the new revenue distribution scheme in the proposed General Appropriations Act lawful?
Provisions in a General Appropriations Act that attempt to amend substantive laws like the Local Government Code constitute unconstitutional riders.
Under Article VI, Section 25(2) of the 1987 Constitution, what requirement must every provision in a general appropriations bill satisfy?
Article VI, Section 25(2) mandates that every provision in a general appropriations bill must relate specifically to a particular appropriation therein.
What is the legal term for an improper provision inserted into a general appropriations bill that attempts to amend substantive law?
An unconstitutional rider is an invalid provision in an appropriations bill that attempts to alter or repeal substantive legislation.
How may Congress validly adjust or modify the statutory percentage shares of local government units in national revenue collections?
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Why cannot a General Appropriations Act be used to amend general substantive legislation like the Local Government Code?
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1. Unconstitutional Rider Provision
Under Article VI, Section 25(2) of the 1987 Constitution, no provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Provisions in an annual budget bill that alter, amend, repeal, or modify general substantive legislation are known as unconstitutional riders. Because the primary function of a General Appropriations Act is to authorize public expenditures for a single fiscal period, Congress cannot insert provisions that permanently alter general statutory laws, such as revenue-sharing formulas established under the Local Government Code.
2. Local Fiscal Autonomy
The 1987 Constitution guarantees local government units local fiscal autonomy, which includes a statutory just share in national taxes automatically released to them. Under the Local Government Code (Republic Act No. 7160), specific percentage distributions among provinces, cities, municipalities, and barangays are explicitly fixed by law. While Congress possesses legislative power to alter or adjust these statutory shares, any change must be enacted through a separate substantive law amending the Local Government Code, rather than through temporary provisions embedded within annual national budget legislation.
3. General Appropriations Limits
A General Appropriations Act is an annual expenditure law whose legal effect is limited to the appropriation of funds for government operations during a specific fiscal year. It cannot serve as a vehicle for general legislation or substantive policy amendments. When an item in the general appropriations bill attempts to redistribute or reduce statutory revenue entitlements fixed by substantive law, it violates constitutional procedure and infringes upon the legislative rules governing appropriations. Consequently, such provisions are null, void, and unconstitutional riders.