The National Assembly has rejected the Senate's amendments to the 2019 Division of Revenue Bill, raising prospects of a delay in disbursing money to counties in the 2019/20 fiscal year.
The bill, which outlines how to apportion shareable revenue between the national government and counties, now heads to mediation, with members from both Houses expected to come up with a final document.
The version passed in the National Assembly had equitable shareable revenue of Sh310 billion for counties, about 30 per cent of the national government's audited accounts as approved by the House and as provided for in the Constitution.
The latest audited accounts are from the 2014/15 financial year, with a Sh1.8 trillion budget, approved in November 2018.
But the Senate raised the shareable revenue to Sh335.7 billion when it considered the bill
Senators also removed the Sh9.4 billion allocation for leasing medical equipment, a programme in its fifth year.
Instead, the Senate wants Sh6.2 billion earmarked for purchasing and maintaining modern specialised medical equipment in at least two health facilities in each county over the medium term.
This, senators say, will ease access to specialised healthcare services and significantly cut the distance Kenyans travel to seek such services.
But on Wednesday, MPs, led by Majority Leader Aden Duale (Garissa Township), Minority Leader John Mbadi (Suba South), Kimani Ichung'wa (Kikuyu) and Makali Mulu (Kitui Central), supported the call to reject the changes, saying they are not feasible.
"You do not just increase the allocation to counties without telling us where it will come from. What has been given to counties is in line with the Constitution," Mr Duale said.
The Constitution provides that not less than 15 per cent of recent audited revenue shall be allocated to counties.
Mr Ichung'wa, who chairs the House Budget and Appropriations Committee, warned members that passing the bill with the Senate amendments will worsen the country's fiscal deficit.