In a show of support, Pichincha's Prefect Paola Pabón led a public demonstration alongside dozens of people to present her case against recent reforms to the Cootad, which were approved by the Assembly and designated as urgent economic measures. This reform mandates local governments to allocate 70% of their budgets to public works and restricts spending on current expenses to 30%. Failure to comply will result in corrective actions from the Ministry of Economy and Finance. The law has been in effect since June 1, and local governments must adjust their financial strategies accordingly.

The reform, which was officially published on February 23, 2026, has sparked significant backlash from local authorities who feel it undermines their autonomy and imposes burdensome fiscal requirements. Paola Pabón and her supporters argue that this allocation rule threatens the financial flexibility of municipalities, particularly in managing daily operational costs. The move to challenge the law in the Constitutional Court symbolizes a growing tension between local governance and national legislation, primarily concerning fiscal autonomy and local governance rights.

As the case unfolds, it highlights key issues surrounding the financial management of local governments in Ecuador. Should the court side with Pabón, it might set a precedent for maintaining fiscal autonomy and could force the national assembly to reconsider similar reforms. Conversely, if the court rules in favor of maintaining the reform, municipalities may face severe limitations on their operational finances, potentially affecting public services and local development projects.