Government adopts measures to ensure financial balance.
The deepening economic crisis under Michel Temer's government has had severe repercussions for state governments, as is the case in Rio de Janeiro and seven other states, which have delayed or staggered the payment of public servants' salaries; in other words, those who did not prepare for the turbulence have collapsed. In Piauí, for example, measures to guarantee financial stability have been taken since 2015, right when Wellington Dias's government began.
By Herlón Moraes The economic crisis that has hit Brazil shows no signs of letting up and has severe repercussions, especially for the states. Those that did not plan to face the turbulence collapsed as early as 2016, such as Rio de Janeiro and seven other states that delayed or paid public servants' salaries in installments. In Piauí, measures to guarantee financial balance have been taken since 2015, right when the government began.
Dependent on transfers from the federal government, the government has sought other alternatives to keep the economy moving in Piauí. The Executive branch has been working intensely to increase its own revenue and, on the other hand, has been cutting expenses.
“Since this government took office, we have been taking actions to control the growth of spending. Last year, Constitutional Amendment 47 was approved, which limits the growth of primary expenses to inflation or, at most, to 90% of net current revenue,” explains Emílio Junior, Superintendent of the State Treasury.
Furthermore, the enactment of decree 17.074 has helped the State reduce the cost of its administration. "This decree established the contingency and reduction in the operating costs of the government apparatus from 10% to 30%. This resulted in a reduction from January to August of this year compared to the same period last year, of approximately 6%," states the superintendent.
According to Emílio, the Executive branch is also working on quantifying the flow of expenditure processes between the State Finance Secretariat (Sefaz), the State Attorney General's Office (PGE), the State Administration Secretariat (Sead), and the Comptroller General's Office (CGE), enabling greater agility in the effectiveness of programmed spending. For 2018, the forecast of expenses within the programmed revenues will already be included in the State Budget.
"So that the management units can work spending the minimum necessary to cover the costs of the operation," the superintendent points out. In the area of its own tax revenue, Piauí saw an increase of 8,43% from January to August 2017 compared to the same period last year.
As if the financial crisis weren't enough, the pension deficit is another obstacle preventing Piauí from making more investments. In 2017 alone, losses reached R$ 1 billion. Of the 12% or 13% collected from civil servants' pension contributions, the State still has to supplement it with 26% or 28%.
Today, only 3% of the state's public spending is non-mandatory; the remaining 97% is mandatory spending. As a result, Piauí, in terms of personnel expenses, already exceeded the prudential limit of 46,55% established by the Fiscal Responsibility Law (LRF) in the second four-month period of 2017, spending 46,70% of its Net Current Revenue (RCL) on personnel.
"We always work to the limit to ensure that state expenses are met," concludes the superintendent.