Experts discuss measures that can help minimize shortfall in state budgets
With an extensive payroll of active and inactive servants, as well as the drop in tax collection, most of Brazilian states are undergoing serious fiscal problems. The topic to be discussed at the seminar “Como resolver a crise dos Estados?” (“How to solve the states´ crisis?”), which will be held at the FGV Brasilia (SGAN 2nd Floor Auditorium, Quadra 602 – Módulos A, B, C and D, Brasilia) by the Fundação Getulio Vargas’ Brazilian Institute of Economics (IBRE) and the newspaper Valor Econômico, on May 6, from 9:30 a.m. to 1:00 p.m. The event will be attended by journalists from Valor Econômico, public managers, and economists.
It will discuss public management issues such as: Social Security reform, state debt, investment financing, and taxation. "We sought to combine various experiences, with managers of states with problems of high indebtedness, poorer states with good examples of management, and others with low level of investment, as a way of drawing attention to the complexity of the subject,” explained Manoel Pires, associate researcher of the area of Applied Economics of FGV IBRE and one of the speakers.
The meeting will also bring together the secretaries of Finance from the states of Sao Paulo (Henrique Meirelles), Minas Gerais (Gustavo Barbosa), Goiás (Christiane Schmidt), and Paraná (Renê Garcia). The event will also be attended by Bruno Funchal (director of the Ministry of Economy) and Felipe Salto (CEO of the Senate’s Independent Fiscal Institution – IFI), as well as Nelson Barbosa, associate researcher at FGV IBRE, and Cristiano Romero, CEO of Valor Econômico, who will be moderating the meeting.
According to Manoel Pires, the issue is urgent and requires attention and a debate on the part of government and society. According to the economist, a number of entities of the federation suffer from tax insolvency and are unable to honor the burden of these debts, maintain the payment of their employees, and deliver public services to society in an appropriate manner.
“I think we have two possibilities. To illustrate one, Congress is currently discussing the Social Security Reform. The reform will help states reduce their payroll costs over time. This in theory addresses the structural problem. The short-term problem has to do with the lack of funds to honor expenses today. The federal government has indicated that it will establish some kind of financial aid for the states, so that they can go through this initial moment of the crisis while the reform does not bring the first results,” said the researcher.
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