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News > Latin America

Costa Rican Court Halts Fiscal Reform, Unions to Continue Protests

  • The bill's detractors protested Tuesday outside the Constitutional Court.

    The bill's detractors protested Tuesday outside the Constitutional Court. | Photo: EFE

Published 17 October 2018

The court argued Tuesday that the bill would affect the judicial branch's autonomy.

As Costa Rican workers entered the 37th day of a national strike against the bill titled Strengthening Public Finance Tuesday, the country’s Constitutional Court halted the controversial fiscal reform measure with an 11 to four vote, arguing it affects judicial autonomy.

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During a protest outside the court, Albino Vargas secretary general of the National Association of Public and Private Employees (ANEP), warned that if the court didn't reject the bill they would continue to call for its nullification.

“Today the justices will tell us whose side they are on, on the side of power or of the people,” Carmen Brenes of the Union of Costa Rican Educators (Ande) said.   

After the court’s ruling Congress can send the bill back to its legislative commission to be re-drafted, eliminating provisions that according to the ruling go against judicial autonomy, including an article that grants the Planning Ministry (Mideplan) power over employment in the judicial branch, and guaranteeing that judicial workers will not be affected by the reduction in percentages for exclusive dedication and the prohibition of private exercise. The judicial branch has also said they will not abide by the technical guidelines of the civil service.

With these changes, the court would approve the bill. 

Congress could also refuse to modify the bill, in which case they would need to secure 38 of 57 votes in a second legislative debate and vote to approve the bill without the court’s go-ahead.

The bill was approved on Oct. 5 with just 35 votes. Members of the left-leaning Broad Front (FA), National Renewal (PRN) and National Integration (PIN) parties got 22 votes against the bill, arguing it disproportionately impacted the country's poor and working class.

Costa Rica: Tens of Thousands March Against Fiscal Reform

President Carlos Alvarado, who has pushed for the bill, disagreed with the ruling saying it does not affect the judicial branch but confirmed his willingness to reach some sort of consensus in order to gain approval for the measure, which he claims the country “urgently” needs.

Alvarado ministers and other state officials have, however, failed to reach agreements with workers' unions and other groups that have been on strike for over a month. The government and unions set up a dialogue on the issue, but they ultimately failed to come to an agreement. The unions were unwilling to halt the strike if the government didn’t withdraw the bill, while the government refused to withdraw the law or to discuss the union’s alternative bill until the strike ended. The union's proposal is known as the Justice and Solidarity Tax Reform, which focuses on combating tax evasion and fraud, increasing taxes on companies and banks that generate extraordinary profits, eliminating "luxury" pensions for former presidents, and reducing state financial support for political parties.

Rocio Aguilar, the country's finance minister, has sent a written note to the court offering guarantees that the judicial branch will not lose its independence in establishing salaries.

“On the possibility that the bill will affect the independence of the judicial branch by regulating certain extras, I would like to point out in a respectful way that the project does not affect or eliminate the judicial branch’s power to modify the pay scale or base salaries,” Aguilar said.

She also said she was willing to include an interpretation of an article that stipulates that the Mideplan will be charged with evaluating public sector employees in order to “guarantee the absolute independence of the judicial power in performance evaluations.”

The bill has been widely criticized by workers’ unions, students, Indigenous groups, Campesinos, and municipal councils. Several of these groups have protested against the measure since it was proposed by President Alvarado in September.

It is unclear if a modified version of the bill would change the impact it would have on public sector workers.

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