FPM: understand the criteria for distributing values ​​to capitals and inland cities

Public budget specialist Cesar Lima explains that this difference in categorization between capitals and the interior is due to the fact that capitals are generally much larger than other cities, which requires other evaluation parameters.

“So, it was decided that for the capitals, 10% of what goes to that state is only for the capitals and the rest is divided between municipalities in the interior and the so-called Reserve municipalities, which have more than 150 thousand inhabitants”, he highlights.

FPM: Union transfers R$1.3 billion, on Friday (20); see how much your municipality will receive

In general, the distribution of FPM resources takes into account the number of inhabitants in each city, in addition to the per capita income of the state to which the municipality belongs. In the case of capitals, to calculate the weight of the population, the number of inhabitants of the specific capital is divided by the number of residents of all capitals.

Fortaleza is usually the capital that receives the largest share of the FPM, even surpassing São Paulo (SP). For this second decade, the city in Ceará should receive more than R$12 million. Cuiabá, on the other hand, should receive the smallest share: around R$1.4 million.

“Capitals” and “Interior”

The categorization of municipalities into “Capitals” and “Inland” within the scope of the FPM emerged in 1967. All cities that are not the capitals of their states, regardless of location or size, were classified as being inland when it comes to receiving federal funds. As a result, coastal cities or even cities in metropolitan regions are part of this group.

For the purposes of the FPM transfer, Ilhéus and Osasco are inland, as are Crateús, which is in the hinterlands of Ceará. Therefore, the transfer to these municipalities takes into account the same criterion: the size of the population in relation to the total population of their respective states. Public budget specialist Cesar Lima explains that a second factor, which is the income per inhabitant of the state, is taken into account.

“First is the population, of course, and second we also have the average per capita income of the state. When you calculate for the interior, you are taking into account its population, in relation to the population of the state. However, the percentage of the state already has these two indicators computed, the population and the average per capita income. So when you move on to the interior, it also already has the issue of the average per capita income of the state included in this calculation”, he points out.

“Reserva”

According to the federal government, Decree-Law No. 1,881 of August 27, 1981, created another category of municipalities, called “Reserve”, for those entities with a population above 156,216 inhabitants. As a result, the distribution of the FPM was:

• 10% for Capitals
• 3.6% for the Reserve
• 86.4% for the Interior

For this second ten days of September, the amount allocated to the municipalities of Reserva is more than R$50 million, with emphasis on São José de Ribamar (MA) and Campina Grande (PB), which have more than R$610 thousand each.

Check on the map below how much your municipality will receive from FPM

FPM

The FPM was created in 1966. Since its inception, the fund’s resources have come from federal revenues from Income Tax (IR) and Tax on Industrialized Products (IPI). Initially, municipalities received 10% of the federal revenue from these taxes, a percentage that gradually increased until reaching 22.5% in 1993. The transfer of IR and IPI resources to the FPM occurs every ten days, that is, every ten days.