Conflict in Misiones: discretionary transfers from the Nation to that province fell 85% in the first quarter

Conflict in Misiones: discretionary transfers from the Nation to that province fell 85% in the first quarter
Conflict in Misiones: discretionary transfers from the Nation to that province fell 85% in the first quarter

The police protest in Misiones turned one week yesterday (Infobae)

After yesterday’s failure in the talks between police and the government of Missions, the protests by the troops for a salary improvement will continue this weekend, and it is still uncertain whether a meeting between the parties will take place today to unblock the conflict. This week, the police’s claims were joined by teacherswith a request for a 100% salary increase.

“Teachers depend on the provincial government, therefore the national government cannot interfere in that negotiation or in that conflict, which is between parties and the (national) State is not one of them,” said the presidential spokesperson. Manuel Adorni, to unlink to the government of Javier Milei of the protests in Misiones that are eight days old today. “Of course we are attentive to how the events unfold and assisting citizens as we can,” clarified the presidential spokesperson.

The Minister of the Interior, Guillermo Francos, along the same lines, stated yesterday that it was a problem that the province must resolve. “I spoke with the governor, of course, these days two or three times. We made ourselves available. “It is an issue to which the province clearly has to find a solution,” he said in statements to Radio Rivadavia.

The truth is that the cut in the sending of funds from the Nation to the province worsened the governor’s cash availability Hugo Passalacqua, leader of the local party Frente Renovador de la Concordia and ally of Peronism. Under Milei’s management, the discretionary transfers from the national Treasury to Misiones had in the first quarter of 2024 a real drop of 85.3%considering inflation, compared to the same period in 2023.

These are the transfers of funds that The national government manages at its discretion or through funds with specific allocations. They do not respond to the percentage of distribution by the federal co-participation law, and the Executive has room to assign them for emergencies that the districts face – such as fires or floods -, or for political interests.

The 85% drop that Misiones suffered in non-automatic transfers is one point above the accumulated global decrease (-84.1%) in this type of transfers from the Nation to the provinces, between January and April 2024 versus the same months of 2023, always considering interannual inflation. This emerges from a report prepared by Nadin Argañarazpresident of Argentine Institute of Fiscal Analysis (IARAF).

Although the reduction was significant, Misiones is not among the 10 provinces that had real drops of more than 95%. In fact, Córdoba, La Pampa, La Rioja and San Luis had an even stronger reduction, of 98%. At the other extreme, those that had a smaller drop were the City of Buenos Aires (-10.4%), Santa Cruz (-51.35) and Chubut (-61.8%).

Between January and April, the province received $3,339 million pesos. A year ago, it had received $5.51 billion in the first four months, at today’s values ​​adjusted by the Consumer Price Index (CPI). The amount transferred is equivalent to 2.31% of the total discretionary transfers made by the National Treasury in the first four months to the 24 districts: $144,438 million. Between January and April 2023, the province had received 2.38% of the total.

Discretionary transfers between January and April 2024, in pesos, with variations in real terms (Source: IARAF)
Discretionary transfers between January and April 2024, in pesos, with variations in real terms (Source: IARAF)

Among those $3,339 million of non-discretionary transfers that Misiones received, 90% ($2,996 million) were only transferred in April. Of this figure, $1.5 billion were contributions from the National Treasury (ATN) sent by the Treasury last month. These are the most political funds of all the Nation’s transfers. Misiones was one of the 7 that received this type of contributions so far in Milei’s management, which in total, in the first four months of the year, amounted to $10.3 billion, 7% of non-automatic transfers.

The direct investment of the Nation and the non-automatic capital transfers to the provinces they also had a decline of 89.4% in real terms, in the annual accumulated, according to a report from the Argentine Association of Budget and Public Financial Administration (ASAP).

The negative trend impacted most provinces, with reductions of 100%, as is the case of La Rioja, Chaco, La Pampa and San Luis. In the case of Misiones it was 97.3%.

Beyond the fact that Milei’s chainsaw has gone through the discretionary transfers, the automatic transfers – depending on the collection and based on the percentage of co-participation that each district has – also had a reduction, but less: only of the 19.58% in real terms. This emerges from the analysis of Infobae of the data published by the National Directorate of Provincial Affairswhich depends on the Ministry of Finance of the Nation.

The decrease is due to the drop in collection, as a result of the economic recession that affected the co-shareable resources, fundamentally, income from Profits and VAT. April was, thus, the eighth consecutive month of decline in automatic transfers.

Between January and April of this year, through co-participation, Misiones received $299,838 million, 19.64% less – in real terms – than in the same period last year.

These numbers explain the need for the governors – not just the president of Misiones – to approve the fiscal relief package being discussed in the Senate together with the Bases Lawsince the reversal in the elimination of the Income tax – which is shared at 60% – will imply new fresh resources for the provinces.

Data processing and visualization: Daniela Czibener

Loading and checking: Desiré Santander

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