The growing dispute over the distribution of resources in the country must be resolved through a debate about the federal tax sharing, through a new law, to avoid unilateral decisions that affect compliance with what is in force.
December 2022: a failure of the Supreme Court of Justice of the Nationrestored the previous co-participation scheme modified by the current government in the year 2020 Come in CABA and the province of Buenos Aires. Given this, the national government initially did not abide by it, which affected the country’s institutional framework, generating worrying effects on “legal security, compromising the country’s predictability and confidence.” Despite this, he revised his position by abiding by it, though he maintained an attitude of default paying for it with bonds, which modifies the 2023 budget. CABA was to receive some $250,000 million ($80,700 per capita) from co-participation and with this judicial decision, will receive about $520,000 million ($168,000 per capita).
Apart from that, the 2023 budget does not modify the key criteria compared to previous years. What is seen is the projection of funds for the last year of the current government, in which the evidence emerges that there was no policy aimed at changing the fiscal relationship between the central and provincial administrations.
“AUTOMATIC” AND “NON-AUTOMATIC” FUNDS THAT ARRIVE FROM THE NATION
The budget includes the funds that will arrive as transfers. From the projection of the national collection comes the estimation of the co-participation. According to him Budget 2023the national collection will be around $35 billion including Social Security income. Of this total, $11.6 billion are earmarked for the provinces to co-participation, special and complementary laws.
Argentina’s low institutionality is one of the great obstacles to social and economic development. An example is the breach of the mandate of the constitutional reform of 1994which established that there should be a new law in 1996but the law that governs is 1988when the 23,548. With these coefficients, the resources are distributed automatically and reflect the discretion that has been present for years. It is necessary to relativize the distribution of the total amounts in pesos by province with respect to the population or else in 2023 the inequalities between jurisdictions that have been dragging on for a long time will be repeated.
On the one hand, the province that receives the most co-participation is Land of Fire since it will have $752,500 per inhabitant next year, and the variability between jurisdictions is 42%. It can be thought that these inequalities in the distribution of co-participation aim to close some economic or development gapbut in reality they arise from the use of the 1988 criteria, which are not objective.
Such is the case of Catamarca and Jujuy, which have a similar level of economic development but have a gap. The first receives 1.8 times more funds per inhabitant than the second, as can be seen in graph 1.
Graph 1: Co-participation in the 2023 Budget. By Province, in $ per inhabitant
The other important source of transfers of funds to provinces obey to discretionary criteria; that are not associated with compliance with specific regulations regarding their distribution. They include current transfers to families, companies or to finance provincial current spending programs, and also transfers of funds to carry out capital expenditures. It is here when the budget allows a close identification of the funds that will pass through the provinces as transfers to carry out works.
The capital transfers projected for 2023 with specific provincial allocation add up to about $700,000 million. In pesos per inhabitant, they reflect a greater variability than that exhibited by co-participation.
In the case of Santa Cruz, which has $470,000 per inhabitant, it will receive 139 times more than the one that closes the ranking, that is, Córdoba, with an average of $3,400 per Cordovan. The coefficient of variability is 271% of the average number of shipments per inhabitant for all the provinces, as shown in graph 2.
Graph 2: Capital Transfers in the 2023 Budget. By Province, in $ per inhabitant
PROJECTS OF WORKS THAT ARE PLANNED TO EXECUTE IN EACH PROVINCE
A factor that also affects is the capital expenditure that the national level wants to carry out in 2023 in public works in the provinces. There are about $500,000 million, of which $455,000 million are unequivocally assigned to a province or CABA, while the rest is multi-jurisdictional or attributed to the Nation.
The distribution by province has a discretionary component since in absolute values, Buenos Aires is the winner with projects for $186,000 million. However, the relative measurement shows that the province in which the highest expenditure per average inhabitant is projected is The Rioja with $41,300 per inhabitant. The one that will receive the least public work per capita is CABA, where the Nation would spend $4,700 per capita. The variability is greater than that of co-participation, but lower than that of capital transfers, as can be seen in graph 3.
Graph 3: Public investment projects in the 2023 Budget. By Province, in $ per inhabitant
It is estimated that capital transfers and projects by province allow minor changes in the original ranking of shipments per capita in terms of co-participation, given that the magnitude of the co-participation is decisive. Once all the concepts are considered in per capita terms as a whole, the original level of co-participation is modified, remaining in first place. Santa Cruzwhile CABA remains the one that receives the least funds, as indicated in graph 4.
Graph 4: Sum Coparticipation + Capital Transfers + Public investment projects in the 2023 Budget. By Province, in $ per inhabitant
In the 2023 budget, it is distinguished that the national government will continue to use the instruments created 35 years ago, where funds from a disorderly tax structure enter a tangle from which they leave to be used in such a way that inequalities and relative arrears are not combated. .
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