Every year the participation of the Argentinean provinces in the distribution of the national resources is being reduced. Even when the co-participation law states that the provinces must receive at least a 34% guarantee of the total collection.
According to Economics & Regions the provinces will receive only the 30,4% of the resources: far away from the guarantee arranged by the co-participation law and 2,5 points less than last year. How many pesos are going to be lost at the end of 2008? It is going to be lost nothing less than 8200 million pesos.
Why is it that the provinces are less participating in the resources cake? The answer is: although the collection increases, the taxes that grow more are those of noncoparticipable character, among them the exports retentions. Because of this, around 40,000 million pesos are thought to be collected in 2008, after the new scheme of variable retentions imposed by the Government.
Which are the provinces with more complicated fiscal situations? Those provinces where an extreme hostility was felt during the agricultural protest.
The province of Buenos Aires deficit is the one that affects the average of the fiscal financial deficit of the rest of the provinces reducing it; approximately a 700 million pesos this year. Cordoba also crosses a complicated situation: a deficit of 340 million pesos projected for the year of 2008. Cordoba is the second province to give a contribution to the retentions of the agricultural sector, with 8109 million annual pesos, which is an equivalent of almost two co-participations received by the Government.
Mendoza and Santa Fe do not have a comfortable fiscal situation and they will see their surplus reduced dramatically if they persist with the salary bid. What happens is that most part of the provinces assigns an average of the 47 percent of their income to the public employee's salary.
This accelerated reduction of the provincial savings was observed in almost all the regions of the provinces the past year: in the NOA (Catamarca, Tucuman, Jujuy, La Rioja, Salta and Santiago del Estero), the financial surplus was reduced a 26%. In Cuyo (Mendoza, San Juan and San Luis), the reduction reached a 33% and in Patagonia (La Pampa, Tierra Del Fuego, Santa Cruz, Chubut, Rio Negro and Neuquén) near the 88%.
A great part of the provinces can try to reach the fiscal balance, if the Government respects the co-participation law and modifies the model of income distribution.
The current model of distribution allows the “Kirchnerism” discipline the governors, intendants and legislators, and they were questioned by different sectors of the society when they tried to gain elections. However, the Congress, the only authorized to review taxes and their distribution, is being carried out by the pro-government majority that, by order of the Pink House, avoids all serious discussion about this situation.
