Brazilians give US$3.5 billion to support Brazil’s federal capital

RIO DE JANEIRO, BRAZIL – This year, the Federal District should receive from the federal government this year R$16.3 billion (US$3.5 billion) more than the expected transfers proportionally to the other states. That is money from the FCDF (Constitutional Fund of the Federal District), paid by all Brazilians.

The additional money was created to pay for the capital’s civil servants -who are among the highest-paid in the country- and the city’s costs for being the headquarters of the three branches of government (Executive, Legislative, and Judiciary).

The fund was established during the Constituent Assembly in 1988. It came into effect in December 2002, at the end of Fernando Henrique Cardoso’s (PSDB) administration.

The value of the FCDF is corrected annually according to the variation of the Union’s revenue. It increased by 2.64% compared to what was transferred in 2021, when R$15.8 billion were transferred.

The R$16.3 billion would be enough to pay one year of Brazil Aid (“Auxílio Brasil”) to almost 3.3 million families. Currently, the beneficiaries of the social program that substitutes Family Grant (“Bolsa Família”) earn, on average, about R$400 per month. They also exceed the R$15 billion investment expected in the 30 years of the new contract for the Dutra highway, which connects the two largest cities in the country – Rio de Janeiro and São Paulo.

These transfers give the Federal District an advantage over other federal units and allow better quality services than the average in the country, with better-paid employees. The bill is shared by all Brazilians, whether they live in the Federal District or not.

USE OF THE MONEY

The Federal District should have R$32.3 billion in other revenues in 2022. With the fund, the collection should total R$48.5 billion – in short, R$1 out of every R$3 of Brasilia’s budget comes from the pockets of all Brazilians.

In the beginning, FCDF money was used to support the Civil and State Police and the Fire Department of Brasília. Later, it also began to provide funds for health and education.

Fifty-three percent of the money (R$8.6 billion) should be invested in security. The city is home to 131 embassies, headquarters of international organizations, and the Three Branches of Power.

Other R$4.4 billion will be spent on health. And R$3.3 billion on education.

But 86% of all this money pays the salaries of the capital’s civil servants, whether active or retired. Only R$105 million (0.6%) will be used for investments, such as purchasing equipment and improvements in the city.

There is criticism due to the salary benefits given to public employees, poor management in government spending, and high levels of inequality.

The capital has neighborhoods with wealth levels equivalent to some European countries and others that match the standards of poor African nations.

Lago Sul, the wealthiest region in Brasília, home to business people, politicians, and ambassadors, has a monthly per capita household income of R$8,317.

A little more than 15 km away, Estrutural, the poorest region of the capital, has an income of R$507 per capita.

Brasília had an average per capita income of R$2,460 in 2021, according to data from Codeplan, the state agency responsible for planning the Federal District.

In other words, the money is poorly distributed.

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