Friday , April 23 2021

The survey shows that 16 countries are at risk of insolvency



BRASILLA – More than half of the countries did not comply with the Fiscal Responsibility Act (LRF) last year when they broke the staff spending limit. A report released yesterday by the State Treasury shows that the problem has worsened in recent years: in 2017, 16 countries and the Federal District extrapolated expenses related to wages and pensions. In the previous nine states.

By law, the administration may not allocate more than 60% of the current net income (LRC) to the employees' sheet, which exposes the public finances and increases the risk of insolvency. The governors-elect will have to deal with this problem.

By allocating most of the revenue to pay for servers, there is less and less to maintain basic services under the responsibility of states, such as security and education. "If the current constitutional parameters are not reviewed, there is a high risk that the number of insolvencies will increase in the coming years," warns the Treasury document.

In five states, the commitment to personnel costs already exceeds 75% of current net income. One of them is Rio de Janeiro, which is in the tax recovery system (RRF) with the Union, but still has difficulty in balancing its accounts. With the history of generous salary adjustments before joining the federal rescue program, the government of Rio de Janeiro spent 81% of its income on leaf payments last year.

The most critical situation is in Rio Grande do Norte (86%), which at the end of last year forced the federal government to introduce a temporary measure (MP) to transfer money to the state and help pay workers – which would be illegal. The Ministry of Finance has forbidden this measure. Minas Gerais, Rio Grande do Sul and Mato Grosso do Sul earned almost 80% of the staffing expenses.

Make-up department

In addition to revealing the instability of state accounts, the document also shows how accounting is drawn up by states to artificially stay within the limits of the fiscal responsibility act. Only six state governments grant in their own data, which extrapolate the rule prescribed by law.

The calculations made by the State Treasury include expenses that were omitted by the states to avoid LRF penalties in the event of non-compliance with the personal expenditure limit. Many state governments exclude inactive accounts or aids from accounts, chancelados by virtue of a government bill of law (TCE).

Rio Grande do Sul, which intends to join the tax recovery program to get relief from debts and have access to new loans, is one of those who still do not recognize makeup. According to state data, the staff income is 56% below the limit. The state divides wages and already admits that it will not pay 13. during this period.

There is also a concern that in some cases the difference between the commitment granted by the State and the calculation of the Treasury exceeds 30 percentage points. This is the case with Rio Grande do Norte, which committed itself to 86% according to the State Treasury (the largest among countries), but only grants 52%.

The Treasury alarm concerns the fact that there are currently many berths that make it impossible to reduce expenses, and in the future there will be no palliative means. Even if attempts are made to limit spending by the next state government, the situation will continue to be critical, because the aging of the population and the increase in pensions will in any way increase spending on inactive people, increasing the weight of the wing.

From 2005 to 2016, head-to-head expenses per capita increased by an average of 57%, and in five states, the increase was over 80% higher than inflation. The result is high indebtedness of some countries and a growing employment rate which is inconsistent with their normal income.

Collapse

Economist Raul Velloso, Public Finance Specialist, claims that the Treasury report "does not tell the whole story" of the state debt. "The State Treasury notes that staff expenditure has exceeded the limit and concludes that the state is insolvent, but it should be understood that this cause means" a way of salvation. "He believes that the main source of problems for state governments today are retired employees and the governors-elects should, from next year, outline strategies for reversing rising spending.

Ana Carla Abrão Costa, who was the Secretary of the Treasury of Goiás, reminds us that data on state expenditure last year indicate a trend that economists already warn. "This unstable trajectory, which has already been outlined" – he said – "If countries do not make corrections, staff expenses will absorb all income, they are on the way to the collapse of public services."

"High personnel expenses are a warning, mandatory expenses that are difficult to reduce: in some countries where the leaf is more important, it is even more urgent because many of them are in the process of accelerated aging and will weigh in the future," he says. Fabio Klein from Tendências.

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