Municipalities will receive 60% less of the FPM, in transfers scheduled for Monday (10)

The BRL 5 billion to which managers will have access is the result of the sum of the first transfer scheduled for July, which totals BRL 3.7 billion — and the extra transfer for the month, instituted through Constitutional Amendment 84/2014, whose value is around R$ 1.3 billion. In the same period of 2022, however, city halls received more than R$ 12.2 billion.

The calculation made by Brasil 61 considers the 20% discount from the National Fund for the Development of Basic Education and the Valorization of Education Professionals (Fundeb). For Cesar Lima, public budget specialist, the significant drop in FPM transfers is a consequence of the slow economic activity which, in turn, is a reflection of the rigid monetary policy that the Central Bank adopts to control inflation.

“We have a very strong and deleterious effect of maintaining this high interest rate index since last year. It is no wonder that some car manufacturing companies took collective vacations, suspended production, reduced shifts, because there is a strain on the economy when we talk about these goods with higher added value. There is a whole industry behind it, indirect jobs that are also affected and the general level of consumption decreases”, he emphasizes.

According to the economist, with inflation decreasing there are prospects that the Monetary Policy Committee (Copom) of the Central Bank will begin to lower interest rates — which could reverse the downward curve in FPM transfers later this year. “The Central Bank’s bias is already towards a decrease in the Selic. So, we should have some positive effect by the end of the year. Let’s wait for the next Copom meeting. In September and December we will have more extra payments from the FPM. And we will compare them to see which bias is directing this constitutional transfer from the government to the municipalities”, he points out.

The mayor of Santa Maria da Boa Vista (PE), George Duarte, who belongs to the Petrolina micro-region, says that FPM transfers are the municipality’s biggest source of revenue. The drop scheduled for the beginning of July, therefore, considerably hinders the services that the city hall provides to the population.

“My main income. We come from a small municipality, in the interior of São Francisco, and revenues are very few. We have survived a lot from the FPM. We have brought companies to invest, to generate more ICMS, jobs and income for our people. We are always aware of transfers, which are not being that whole thing, but it is enough to maintain”, he points out.

Santa Maria da Boa Vista, which has around 40,000 inhabitants, will pocket just over R$ 1.3 million, if you add the ten-day transfer and the extra transfer.

City halls blocked

According to data from the federal government’s Integrated System of Financial Administration, until July 5, the municipalities below were prevented from receiving transfers from the FPM. To resolve the situation or obtain further clarification, the representatives of each city hall must address the responsible body in the respective region.

Check if your city is on the list:

• ALEGRIA (RS)
• BOA VIEW OF THE MISSIONS (RS)
• BOA VISTA DO INCRA (RS)
• BOM JESUS (RS)
• CAPELA DE SANTANA (RS)
• CARLOS BARBOSA (RS)
• BLACK COAL (RS)
• IMBÉ (RS)
• LAGOA DA PRATA (MG)
• MANOEL VITORINO (BA)
• PANAMBI (RS)
• PARAUAPEBAS (PA)
• HIGH STONES (RS)
• PERIODS (IF)
• BRIDGE PRETA (RS)
• QUEVEDOS (RS)
• REDEEMER (RS)
• SANTA VITÓRIA DO PALMAR (RS)
• SÃO LUIZ GONZAGA (RS)
• TAQUARUÇU DO SUL (RS)
• TOLEDO (PR)
• TRÊS CACHOEIRAS (RS)
• UMBAÚBA (SE)
• XANGRI-LA (RS)

According to the National Confederation of Municipalities (CNM), the main reasons why a city hall is prevented from receiving the FPM are:

• Failure to pay the contribution to Pasep;
• Debts with the INSS;
• Debts with the inscription of the active debt by the Attorney General of the National Treasury (PGFN);
• Lack of accountability in the Public Health Budget Information System (Siops).

To unlock the transfer, the municipality must identify the body that determined the freeze. Then, you must find out the reason and rectify the situation. It is worth remembering that the city hall does not permanently lose the blocked resources. They are just frozen while pending issues are not settled.

FPM: what is it?

The FPM is a fund through which the Union transfers, every ten days (hence the name “decêndio”), 22.5% of what it collects with the IR and the IPI to the municipalities. Each month, therefore, there are three transfers, which occur on the 10th, 20th and 30th. If the date falls on a Saturday, Sunday or holiday, the transfer is brought forward to the first working day beforehand. City hall money is credited by Banco do Brasil.

The participation percentages of each municipality are calculated annually by the TCU according to the number of inhabitants of each city and the per capita income of the states. Municipalities are divided into three categories: capital, interior and reserve. State capitals and Brasilia receive 10% of the FPM. The other Brazilian municipalities are considered inland, and pocket 86.4% of the fund. Reserve municipalities are those with a population greater than 142,633 inhabitants and receive — in addition to participation as an interior municipality — an additional quota of 3.6%.