Personnel costs can cause states to crack, the Treasury warns

BRASÍLIA – Responsible for the worsening of the financial crisis of the states, the expenditure with the payment of civil servants and pensioners grew R $ 25.4 billion and R 2017 reached $ 402.93 billion. Growth was 6.7% a large part of the deterioration of public finances remains the cost of the government's treasury with the social security of its servers, which last year reached a value of R $ 93.98 billion. A jump of 14% in the social security quality mark.

These figures are included in the annual report of the National Treasury, published on Tuesday 13. The study shows a broad x-ray of the Brazilian states and capitals and gives a warning signal for the problems that the governors will encounter from the first day. when they take office.

14 states break the limit

As a result of this situation, the State's government deficit for 2017 showed a deterioration of R $ 12.5 billion compared to 2016, which ended the year with a deficit of R $ 20.3 billion, the worst result in the Triennium 2015- 2017.

On the basis of the Treasury data, 14 states break the limit of the allocation of personnel costs as set out in the Fiscal Responsibility Law (LRF). The champion is Minas Gerais. Of the total revenue of Minas Gerais, 79.18% is committed to pay the salaries and pensions of their servers.

Second comes Mato Grosso do Sul, with 76.77% of the earnings recorded in the payroll, followed by Rio Grande do Norte (72.07%), Rio de Janeiro (70.8%) and Rio Grande do Sul (69.14%).

Non-sustainable situation

The situation is on its way to a framework of unsustainability of the finances of the States, the Treasury acknowledges.

"It is an indication of the problem of the unsustainability of government pension schemes, given the increasing consumption of financial resources, which could be aimed at meeting and expanding the basic services required by society", the Treasury warns in the report.

The report shows that, despite federal rescue operations by extending the debt and suspending payments on monthly installments, governors have not done their "homework" by pushing the tax adjustment account later.

As the statistics / broadcast showed, the deterioration of the image continues in 2018 and a new federal rescue plan for the states is already inevitable and must be linked to the reform of the pension system.

In order to stop a general crackdown in 2019, the economic team's evaluation according to sources is that states must also increase the server's social security contribution, privatize assets, cancel public tenders and approve any pay rise for some time. for all powers.

Only after the elections

Because of the election legislation, the Ministry of Finance has chosen not to publish the report before the elections. But many governors were chosen with promises of salary reviews and new recruitment of white-collar workers.

For the Treasury, the data indicate that the largest problem of states is spent on personnel. Expenditure on the pensions of state officials is strongly influenced by the special categories (teachers and military personnel) that account for about two-thirds of the non-active state and who retire on average at the age of 50.

The median of real expenditure growth was 2.96%. This means that in 2017 half of the Brazilian states had a real increase in personnel costs of more than 3%, an amount that was excessively high according to the Treasury.

The table of the past seven years shows a real growth of 31.58% of personnel costs. The general picture was of increasing the expenditures of both the active and the inactive, although some states showed a more modest growth than others.

The breakdown of costs between assets and inactive has some discrepancies. Some states, such as Rio de Janeiro, Maranhão, Mato Grosso do Sul and Minas Gerais, have greatly increased their expenditure in assets. States such as Ceará, Espírito Santo and São Paulo had negative growth in the use of assets.


The rigid nature of staff costs, together with the deterioration of social security, makes it difficult to limit spending on those states that already allocate a large part of their income to the payment of salaries or pensions.

The difference between states is very important. The champion of increased spending was Mato Grosso do Sul, an increase of almost 20%. The Holy Spirit had a real fall of almost 4%.

According to Treasury data, there was a real increase in spending in almost all states except Para, Paraiba, Amapá and Espírito Santo. Most states experienced a slight real increase in the use of assets, possibly as a result of the previous wage increase policy.

The federal district leads the ranking with the highest per capita expenditure in the country with officials: R $ 4,752.19.

Tax liability law

The states of Minas Gerais, Mato Grosso do Sul, Rio Grande do Norte, Rio de Janeiro, Rio Grande do Sul, Mato Grosso, Sergipe, Acre, Paraiba, Roraima, Paraná, Bahia, Santa Catarina and Alagoas show a compromise of their income with expenses with staff higher than the limit of the Fiscal Adjustment Plan (FAP), signed with the federal government, and the Fiscal Responsibility Law (LRF) of 60%.

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