Goiás declares financial emergency in public accounts.

By Wellton Máximo – Reporter for Agência Brasil - The governor of Goiás, Ronaldo Caiado (DEM), decreed this Monday (21) a state of financial calamity for at least six months. The measure will be sent to the State Legislative Assembly, where it needs to be approved.

During the state of financial emergency, the government of Goiás will be able to renegotiate contracts with suppliers and suspend non-essential services. According to the decree, the six-month period may be extended if necessary. Once the decree is approved, the Goiás State Secretariat for Management and Planning will have more freedom to reallocate resources and adopt the measures it deems necessary to rebalance state finances.

Last week, Governor Caiado met with the Minister of Economy, Paulo Guedes, to request the inclusion of Goiás in the fiscal recovery regime (RRF). Responsible for assisting states with financial difficulties in exchange for a rigorous fiscal adjustment program, this regime is currently applied only in the state of Rio de Janeiro.

Goiás became the second state to declare a state of financial emergency in 2019, bringing the number of states in this situation to five. Last Thursday (17), the governor of Mato Grosso, Mauro Mendes (DEM), made the same decision, after the state failed to obtain assistance to advance export funds. With the financial emergency, contracts and tenders are being reassessed and a series of expenses have been suspended. New contracts have been prohibited for six months.

To be part of the Fiscal Recovery Regime (RRF), a federative unit must have a sum of debt service and personnel expenses equivalent to at least 70% of its net current revenue. According to the National Treasury, currently Rio de Janeiro, Rio Grande do Sul, Minas Gerais, Mato Grosso do Sul, and Rio Grande do Norte meet this requirement.

In 2016, the states of Rio de Janeiro, Minas Gerais, and Rio Grande do Sul had declared a state of financial emergency.