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Balancing the budget

A piece of academic research will , by developing the appropriate methodology, help town hall administrations to meet the challenge of balancing the municipal budget. “Today the city halls have a sword hanging over their heads”, says Carlos Alberto Vogt, ex-executive director of the Uniemp Institute and the research coordinator. In fact, those who don't comply with the Law of Fiscal Responsibility – spending on personnel no more that 60% of the income -, risk being sent to prison for crime against public patrimony.

“In the face of this, the city halls will have to improve their system of administration, from the process of collection to the application of collected resources”, says Vogt. “From that point on, they will have conditions not only to comply with the legal obligations but even to obtain resources to invest in their social programs.”

The Uniemp Institute, an institution which brings together universities and companies, is developing the study in partnership with the administration of São João da Boa Vista, a city with close to 70,000 inhabitants on the border of São Paulo with the State of Minas Gerais. Supported by FAPESP, the project should be completed by January of 2002, when the model will be available for other prefectures. In line with the “electronic government” that São Paulo is implanting, the program emphasizes the automation of tasks.

Computers and the Internet are making it possible to reduce costs, to trim bureaucracy, to create transparency for citizens – and, by combating tax evasion, to increase revenues more through efficiency rather than through a tax hike. “The city halls need to react more caution, expanding their collection base without killing off the taxpayer.” However, the fundamental point of the project is that it demands the total commitment of the city halls to the correction of a very common distortion. “Instead of looking at the real income to define their expenditure, the municipalities do exactly the opposite: total up the expenditure and afterwards have to swell the income in order to balance the accounts. This needs to be corrected”, says Vogt.