Panama Decentralization After Méndez: What Comes Next

Roxana Méndez put her position at President José Raúl Mulino’s disposal on 15 October. That was not an immediate departure: she remains director until Mulino designates a successor. She leads the authority sending property-tax and project money to Panama’s 81 municipalities and 701 community boards.

Law 66 of 2015 lets the president appoint the director and deputy for five years. The National Assembly must ratify the choice, and candidates need a degree and five years’ municipal experience. Mulino named Méndez on 19 June 2024; lawmakers confirmed her on 11 October.

No successor had been named by 16 October, according to the agency and local reports. The agency reported transferring US$225 million to local governments between August 2024 and September 2026. Because formulas sit in law, a new director changes pace and priorities, not the amount owed.

Panama’s decentralization agency, the National Decentralization Authority, moves public money to municipalities and community boards. It funds local projects and distributes property-tax revenue under rules set by Law 66 of 2015. That matters because it connects national collections with services and projects managed locally.

Half of each district’s property tax returns to that district, while smaller districts receive at least US$500,000. The authority also sends money for local projects, making its leadership important for timing and priorities. Between August 2024 and September 2026, it says it transferred US$225 million locally.

Its recommended 2027 budget is US$296.4 million, including US$182 million passed fully to municipalities. Because the formulas are written into law, a new director cannot change what municipalities are owed. The director can change how quickly funds move and which projects receive attention.

Panama’s president appoints the agency’s director and deputy for five-year terms, but the National Assembly must ratify them. Candidates need a university degree and five years of proven municipal experience. They also cannot have convictions for common crimes or against public administration.

Roxana Méndez illustrates the process. TVN says President José Raúl Mulino named her on 19 June 2024. Mi Diario reports Assembly ratification on 11 October. That vote is not optional: it gives the legislature a formal approval role before the appointment stands.

As of Friday 16 October, no successor had been named, and Méndez remains until one is designated. The deputy director covers temporary absences under Law 66, but the sources do not identify the current deputy. The Assembly is also reviewing the agency’s recommended US$296.4 million 2027 budget, including US$182 million for municipalities. Thus, lawmakers’ immediate role is ratifying the president’s nominee; the final budget remains unconfirmed.

The agency handles major public transfers to Panama’s 81 municipalities and 701 community boards. It moved US$225 million between August 2024 and September 2026, showing the scale of local-government funding.

Its recommended 2027 budget is US$296.4 million. That includes US$182 million in property-tax revenue, which must go entirely to municipalities under the legal system.

These figures matter because the agency director controls timing and priorities, not each municipality’s legal entitlement. Law 66 requires half of each district’s property tax to return locally, while smaller districts receive at least US$500,000. The proposed budget still needs final approval, and no successor to Roxana Méndez had been named by October 16, 2026.

Law 66 fixes each municipality’s share of property-tax and other transfers. The new director can change the agency’s pace, priorities, and attention to delayed payments. That could speed up or slow paperwork, approvals, and releases, even when amounts remain unchanged.

Half of each district’s property tax returns to it, while smaller districts receive at least US$500,000. Panama City Mayor Mayer Mizrachi cited US$1.107 billion collected since 2021, but only US$618 million transferred. Those figures fueled claims that payments were being held back, though they do not prove wrongdoing.

The agency says it moved US$225 million to local governments between August 2024 and September 2026. As of Friday 16 October, no successor had been named, and Méndez remains until replacement. The agency’s proposed 2027 budget includes US$182 million in property tax for municipalities, making administrative speed important.

The government is targeting transfers made outside Law 66’s formulas because they may have wasted public money and weakened trust. Mulino called parallel decentralization a disaster, saying about US$320 million was squandered from 2021 to 2024. The scrutiny also supports a broader anti-corruption effort while protecting municipalities’ legally defined funds.

One example involves eight former Belisario Porras community-board staff. On October 15, a court ordered their provisional detention over alleged embezzlement of about US$8 million. The case began with an agency complaint; prosecutors charged 15 people, but all accused remain presumed innocent.

Investigators were analyzing 72 audit reports, while 99 people had been charged with embezzlement by August. Méndez also reported 353 agency complaints to the Assembly in September, showing the issue extends beyond one case. Going forward, audits and prosecutions may strengthen oversight, but the director cannot change municipalities’ legal transfer formulas.

Decentralization sends some national revenue back to municipalities and community boards. Sharing property-tax revenue gives local governments money for local responsibilities instead of keeping all collections centrally. The arrangement matters because mayors need predictable funds for neighborhood projects, while residents can see who controls spending.

Panama’s Law 66 sends half of each district’s property tax back to that district. Smaller districts receive enough to reach at least US$500,000. That floor helps districts with small tax bases fund local work. Official figures show US$1.107 billion collected since 2021 and US$618 million transferred.

The article does not list every service, but it describes transfers as supporting local governments and projects. The agency’s recommended 2027 budget includes US$182 million in property tax for municipalities in full. Because formulas sit in law, a new director can change timing and priorities, not the amount owed.