Understand the proposal that removes outsourcing expenses from personnel expense limits

This measure, according to economist Renan Gomes de Pieri, provides conditions for public managers, especially in states and municipalities, to manage the budget in a more flexible manner.

“The law needed to undergo adjustments and this flexibility can be welcome, given that each municipality or state has different needs. It makes no sense for us to limit the composition of the budget, what goes to employees, what goes to other areas, in a very harsh way”, he highlights.

Currently, the legislation establishes spending limits on personnel, as a percentage of revenue, for the three branches of government, the states, the Federal District and municipalities. The distribution is as follows:

Union (50%):

• 2.5% for the Legislative Branch, including the Court of Auditors
• 6% for the Judiciary
• 0.6% for the Federal Public Prosecutor’s Office
• 3% to cover expenses of the Federal District and former territories
• 37.9% for the Executive Branch

States (60%):

• 3% for the Legislative Branch, including the Court of Auditors
• 6% for the Judiciary
• 2% for the Public Prosecutor’s Office
• 49% for other Executive personnel expenses.

Municipalities (60%)

• 6% for the Legislature, including the Court of Auditors
• 54% for the Executive

Among the situations included in the new rule are cases in which the expenditure is characterized as public promotion of third sector activities through social subsidies; and provision of services through the contracting of companies, social organizations, civil society organizations, cooperatives or public consortia.

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Despite considering the measure favorable, public budget specialist Cesar Lima states that managers need to be careful not to use this flexibility irresponsibly.

“There may also be a downside, where the manager may think that this is a space to put more people in the city hall. This varies from manager to manager. A manager with a developmental profile will use this to increase investment capacity. A manager with a more paternalistic approach will use this to put more people in the public sector,” he says.

The approved project is a substitute from deputy Nely Aquino (MG) for the Complementary Bill (PLP) 164/12which was presented by deputy Elcione Barbalho (PA).