Mexico's President Enrique Pena Nieto addresses the audience during his third state of the union address at the National Palace in Mexico City, September 2, 2015. REUTERS/Edgard Garrido

Mexican President Enrique Peña Nieto announced his government’s budget for 2016 last week, detailing a series of cuts and other measures aimed to indicate the “government’s commitment to maintain the country’s fiscal and macroeconomic stability,” according to Eurasia Group.

But, to some, the Peña Nieto administration’s cuts to several important security programs signal a more worrying trend.

"If security is a priority of the current administration, it is not visible in this budget proposal,” said Alejandro Hope, the security and justice editor at El Daily Post.

‘Eliminating the inertia’

The government’s 2016 budget, according to Hope, will cut funding and subsidies for local law enforcement by nearly 2.9 billion pesos, or about $172 million.

Most of the cutting affects state-level spending, in particular two funds that bolstered local police forces.

All told, Hope writes, for state-level security spending, “One out of every five pesos received in 2015 won’t be there in 2016.

Police officers stand guard as members of the teacher's union CNTE (not pictured) march past the Revolution Monument in Mexico City, June 1, 2015. REUTERS/Henry Romero

The government said this move was for “eliminating the inertia” that has hindered local crime-fighting programs. “Inertia,” according to Hope, may refer to widespread corruption that has plagued government projects.

At the federal level, the National Crime Prevention Program will take a roughly $35.6 million cut. The Interior ministry, which runs that program and almost all federal security programs, will see its investment budget slashed by 77%.

The Federal Attorney General’s office will also sustain a 92% cut in investment funds, down to about $4 million next year from $53.4 million this year.

Cuts in investment spending will mean new projects — like modernization efforts — will be hit first, as opposed to day-to-day operations. However, with the country’s homicide rate ticking up in recent months, any cuts at all are likely to spur popular concern.

Policemen catch fire after being hit by a Molotov cocktail during a protest to mark the eight-month anniversary of the Ayotzinapa students' disappearance in Mexico City, May 26, 2015. REUTERS/Henry Romero

Hope notes the cuts also signal that criminal prosecution is not being prioritized, a worrying development given government missteps in investigating the kidnapping and killing of 43 students in southern Mexico — a case that continues to receive international attention.

The government doling out fewer pesos to local authorities may have a more proximate cause than the slump in global oil prices: corruption.

Mexico’s public-spending watchdog, the federal audit office, found more than 50 irregularities in public security funding, affecting more than $33 million in public money, in just four of Mexico’s 31 states, including Sinaloa — a historical center of the drug trade and home to notorious drug kingpin Joaquín “El Chapo” Guzmán.

Back to economics

Mexico's President Pena Nieto and first lady Rivera celebrate Independence Day in Mexico City. Thomson Reuters

The budget proposal was not without positive steps.

According to Eurasia Group, Peña Nieto’s government also included measures to benefit local private sector firms. Among other things, it will allow the firms to make immediate tax deductions and repatriate capital.

Other steps to counteract the cuts include expanded public-private partnerships and bond offerings to increase private-firm participation in public projects, like education and oil exploration.

Beyond cuts to security programs, however, there are reasons for concern.

The cuts, as Eurasia Group notes, will negatively affect growth, which, coupled with oil prices that won’t budge and lingering market uncertainty, may keep the Mexican economy from meeting deficit and growth targets. (The government bumped 2016 growth estimates down to a 2.6%-3.6% range, down from 3.3%-4.3%).

The decline in oil prices has been especially problematic for Peña Nieto. It has undermined the source of one-third of the government’s income, and while the government doesn’t plan to cut oil production goals, infrastructure shortcomings and corruption challenges at state-run oil company Pemex may undercut the country's ability to maintain current production levels.

(The government's budget also included the lowest amount proposed for oil exploration in nine years, leaving room for foreign companies to expand into the sector.)

Excess natural gas is being flared, or burnt off, at a flare stack at the refinery in Tula, November 21, 2013. Mexico's oil industry, saddled for years with bloated costs, chronic underinvestment, and generous government fuel subsidies, received shake-up in October that dismantled the state-run Pemex oil and gas monopoly, ending decades of self-reliance and potentially opening the door to foreign oil companies. REUTERS/Henry Romero

‘Strict austerity measures’

With just 30% approval for his handling of the economy, Peña Nieto’s government has emphasized its efforts to ensure a solid economic footing in the face of recent economic uncertainty.

Mexican Finance Minister Luis Videgaray speaks during an official ceremony at the National Palace in Mexico City, February 4, 2015. Edgard Garrido/Reuters

Budget cuts in 2015 were characterized as a “preventive adjustment.”

The plan for 2016, which contains a spending cuts that equal 1.15% of GDP, or $13.15 billion, is to build “less costly but more efficient” government, in the words of Finance Secretary Luis Videgary.

During comments this week, Videgaray doubled down on this sentiment.

“The main goal of this package, given the international economic circumstances, is to preserve the stability of our economy,” he said on September 8.

Comments issued by Videgaray’s boss the week before the budget proposal may signal a more worrying trend, however.

“This project will include strict austerity measures,” Peña Nieto said on September 2.