In response to a new legal reform impacting funding and priority services in Quito, the city authorities have declared their intention to pursue judicial action. The reform, which modifies the Organic Code of Territorial Organization, Autonomy, and Decentralization, specifies how financial resources from the national budget are allocated to regional governments. This is particularly significant for Quito, as the legal changes will likely lead to at least eleven public works and services being deprioritized due to new financial constraints and regulations.

The core of the reform affects the distribution of permanent and non-permanent income to decentralized autonomous governments (GAD). Specifically, municipalities will receive 21% of permanent income and 10% of non-permanent income only if they meet a minimum allocation rule outlined in Article 192 of the reform. This rule requires that a minimum of 70% of the annual budget for non-financial expenditures must be allocated to investment, maintenance, and infrastructure replacement, which could limit available funds for other essential services and projects.

The potential implications of this reform highlight the ongoing tensions between central and local governments in Ecuador regarding resource allocation and local governance. Quito's legal actions could set a precedent for how municipalities negotiate funding and prioritize services amid changing legal frameworks that may restrict local autonomy. As the situation develops, it could impact public perceptions of government efficiency and effectiveness in addressing urban needs and managing resources sustainably.