The more than 19,000 candidates for mayor in these elections compete to take over command of city halls that, in most cases, will have few resources of their own to pay expenses or promote public policies.
A survey by the G1, based on data from the municipal accounts submitted to the National Treasury in 2019, shows that, in 3,400 cities, at least 80% of the resources used come from transfers made by the federal government or by the states. In this group, there are 2 thousand municipalities in which the dependence on transfers to close accounts reaches more than 90%.
Survey shows that 3,300 cities have 80% of the resources coming from the Union or the state – Photo: Fernanda Garrafiel / G1
The data demonstrate the difficulties that the municipalities face to boost the local economy, attracting investments and expanding their own collection base. In absolute numbers, the situation is more critical in the Northeast (1,412) and Southeast (957), which have the largest number of cities with high dependency. In these municipalities, for every R $ 10 of city hall revenue, R $ 9 comes from transfers from the states or the federal government.
Distribution by region – Photo: Fernanda Garrafiel / G1
The comparison between the regions, considering the proportional data, however, indicates that the states of the North (67%) and the Northeast (63%) have more cities dependent on transfer funds. Between the 1980s and now, Brazil created more than 1,500 municipalities, many of them in regions with low economic dynamism. There are cities that have failed to stimulate the local economy to expand their collection. When analyzing the relationship between the dependency ranges of the municipalities and the median GDP per capita, it is possible to identify that the number of cities with high dependency falls as GDP per capita rises.
Municipalities created over the years – Photo: Fernanda Garrafiel / G1
High dependency affects the implementation of public policies
The lack of own resources directly affects the implementation of public policies that candidates for mayor promise in campaigns today. According to FGV / IBRE researcher Juliana Damasceno, high dependence limits the ability of mayors to act, and city halls are responsible for countless services directly for citizens.
“The more municipalities depend on transfers, the more difficult it becomes to plan policies and cover expenses. And it gets worse when they depend on states that are facing cash difficulties, as is the case in Rio de Janeiro. Therefore, what these data indicate is that we need to make a tax adjustment to give greater autonomy to the entities of the federation, so that they are able to honor their commitments and carry out their policies ”, defends Juliana.
Municipalities by dependency range – Photo: Fernanda Garrafiel / G1
To carry out the survey, the G1 used data from the Brazilian Public Sector Accounting and Tax Information System (Siconfi), which is fed by the city halls themselves. After calculating the net revenue of each municipality, the dependency rate was produced, which considers the total transfers in relation to the total revenue of the cities. As there were data with filling errors, some cities were excluded from the study, totaling, in the end, 5,162 municipalities. The methodology used was the same applied by technicians from the National Treasury, who carried out a similar study and reached conclusions similar to data from 2015, that is, the large number of cities that depend on transfer funds to close the cash register.
Another fact that draws attention in the crossings made by G1 it is the relationship between the dependency bands and the population size of cities. There is a greater proportion (44%) of cities with dependence above 90% and which have a population of less than 50 thousand inhabitants. In the group of cities with more than 500 thousand inhabitants, dependence is less than 50% in most cases.
For Juliana Damasceno, the high dependence of Brazilian municipalities demonstrates the need for a tax reform that better organizes the system of collection and distribution of resources. She also recalls that part of the problem of the low dynamism of the local economy of the municipalities is related to the local characteristics of the cities.
“If you live in a city in the interior of Brazil that does not have a film service and you want to hire this service, you will need to hire in another municipality. Therefore, the lack of regional dynamism in the economy is related to the way in which services have been organized in cities. This is very important to take into account because, although cities are dependent on transfers, something can be done to promote local dynamism ”, says Juliana.