Sinergia pública para la sostenibilidad territorial | Hector Mauricio Montes Padilla | TEDxESAP
Héctor Mauricio Montes Padilla shares how a small public finance team in a Colombian municipality transformed its fiscal situation through creative, leverage-based strategies including payment culture campaigns, business census initiatives, tax statute reforms, and process improvements. By building internal trust and forming win-win partnerships with banks, chambers of commerce, and public utilities, the municipality grew its own revenue to exceed national transfers. The talk argues that sustainable territorial finances depend on empowered teams, citizen engagement, and strategic collaboration rather than dependence on central government funding.
Summary
The talk opens by framing territorial finance as analogous to personal finance — municipalities, like families, need income to cover expenses and provide services such as health, education, water, and roads. The speaker highlights that in Colombia, seven out of ten municipalities face fiscal deterioration according to the fiscal performance index, with more than 70% of municipalities dependent on national transfers for over 70% of their revenue. This dependency limits their ability to fund projects independently, making own-source revenue generation critical.
Héctor introduces himself as an industrial engineer and public management specialist who joined a municipal finance team as a contractor. He credits the team's Secretary of Finance as a transformational leader who built trust, empowered team members by listening to all ideas without dismissing them, and motivated the group to take action — qualities he argues are often overlooked in public sector management.
The team implemented four major strategies. The first was a 'culture of payment' campaign, offering early payment discounts (10–30%) and introducing prize raffles for taxpayers. Rather than incurring costs for prizes and events, the secretary introduced the concept of 'leverage' — negotiating with banks, which had their own deposit and account-opening targets, to supply prizes in exchange for improved municipal collections. Public infrastructure like a Ministry of Culture stage and local training schools was used to host transparent, open raffle events at minimal cost.
The second strategy was a business census to identify unregistered taxpayers. The team partnered with the Chamber of Commerce, firefighters, health officials, planning offices, and music rights organizations (ACINPRO/Sayco) to create a comprehensive legality campaign. University students served as surveyors, following urban routes with simple questionnaires that also educated merchants on registration procedures. This resulted in a multi-party win: more businesses registered, partner agencies received fees, and the municipality expanded its taxpayer base.
The third strategy was the creation of a unified municipal tax statute, guided by the principle of vertical equity — larger landowners and higher-earning merchants pay proportionally more, while those in similar circumstances pay equal amounts. Counterintuitively, tax rates were lowered, which — combined with the expanded taxpayer base from the first two strategies — actually increased total revenue, as more compliant taxpayers more than offset the rate reduction.
The fourth strategy was personalized payment agreements and improved payment accessibility. The secretary empathetically called delinquent taxpayers to understand their barriers, then offered customized installment plans while still allowing participants to benefit from discounts and raffles. Processes were streamlined by simplifying forms and connecting all local banks to accept payments. Later, the public utilities company was leveraged to deliver tax bills door-to-door alongside utility receipts, in exchange for a portion of the delivery fee.
The speaker concludes by noting that by 2025, the municipality had risen to the second fiscal category in Colombia, with own-source revenue exceeding national transfers — a transformation he attributes not just to these strategies but to a leadership model based on trust, empowerment, and collaborative action. He calls on other territories to replicate this approach, emphasizing that sustainable finances begin with empowered people, not just better policies.
Key Insights
- The speaker states that in Colombia, seven out of ten municipalities are at risk or experiencing fiscal deterioration according to the fiscal performance index, meaning their revenues cannot cover their planned expenses, leading to debt accumulation and depreciating assets.
- The Secretary of Finance introduced the concept of 'leverage' by negotiating with banks — which had their own deposit collection targets — to supply raffle prizes in exchange for improved municipal tax collection, turning what seemed like an expense into a cost-free incentive program.
- The team lowered tax rates as part of their equity-based tax statute reform, and counterintuitively, total revenues increased because the expanded taxpayer base from their census and legalization campaign meant that more people paid even at the lower rate.
- The speaker argues that internal trust within a public team is as important as earning citizen trust, noting that the Secretary of Finance empowered staff by listening to every idea without dismissing it, which generated commitment and produced unconventional strategies.
- By 2025, the municipality where these strategies were implemented had reached the second fiscal category in Colombia, with own-source revenues exceeding national transfers — a significant reversal from the dependency that characterizes over 70% of Colombian municipalities.
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