Government Investments in São Paulo State Have Dropped Under Governor João Doria

SÃO PAULO, BRAZIL – Investments by the São Paulo government decreased 26 percent in the first six months of João Doria’s administration and hit their lowest since 2012.

Despite the campaign’s pledge to intensify the privatization of the transportation sector to invest further in education, health, and safety, 84 percent of the R$2.72 billion (US$ 688 million) invested by the governor between January and June was used for road, rail and subway works.

A survey carried out by the Estado newspaper on the Finance Secretariat’s budget implementation system shows that the amount of funds invested by the state government in the three areas prioritized by Doria amounts to R$380 million in the period, a figure lower than that invested by the management in road rehabilitation and redevelopment works alone — R$499 million — which are financed by external sources, such as the World Bank.

Doria’s government argues that some of its priorities needed to be revised at the outset of its administration due to the condition in which it took over the state from former governor Márcio França, Doria’s former ally, whom he defeated in the second-round elections of 2018.

According to the current administration, its predecessor’s budget was overestimated by approximately R$10.5 billion, and many works were delivered incomplete and stalled, such as Rodoanel Norte.

For Doria’s administration, this is one of the reasons why the state’s total investments were lower than in the first half of 2018, when R$3.67 billion were invested — a figure readjusted by inflation for the period. Spending peaked in 2014, at R$9 billion. With the economic recession, transfers have only declined since 2015.

Interruptions of Major Works

Government figures show a reduction in spending also in areas prioritized by the governor, although the conclusions or interruptions of major works in the transportation sector have had an impact on the downturn in state investments under the new administration.

In terms of public security, R$46.8 million had been invested in improving civil, state and technical-scientific police facilities by the beginning of August. This figure is equivalent to fifteen percent of the amount invested in the portfolio last year (R$308.3 million).

On the other hand, R$171.3 million have been invested in health this year. In 2018, R$903 million had been invested in the area.

Doria’s administration argues that, historically, spending increased over the second half of the year, when governments customarily release frozen funds as a precaution, at the beginning of the year and based on the performance of their collections.

João Doria’s government declared, in a note, that the 26 percent decline in investments is due to “economic and financial factors and still includes the 2018 political context”. The administration emphasizes that it was required to suspend R$5.7 billion in spending as a result of the “uncertain and overestimated revenues of the previous administration” and points out the “slow economic rebound” this year.

The information is from the newspaper “O Estado de S. Paulo”.