CNM warns of R$ 190 billion risk to Brazilian municipal finances

The National Confederation of Municipalities (CNM) is warning of a potential R$ 190 billion impact on municipal finances due to proposed federal legislation. According to CNM President Paulo Ziulkoski, a series of projects known as the ‘pauta-bomba’ (bomb agenda) could significantly increase municipal expenses without providing new funding sources.

The CNM estimates that 58 proposals regarding salary floors for 33 professional categories could cost municipalities over R$ 80 billion annually. Additionally, three proposals for special retirement regimes and benefits could impact accounts by more than R$ 100 billion, while a potential reduction in working hours could add R$ 10 billion in yearly expenses.

In response, municipal leaders, including representatives from Mato Grosso, are mobilizing in Brasília to advocate for legislative changes. Key demands include a gradual increase in transfers from the Municipal Participation Fund (FPM) and the approval of PEC 253/2016. This constitutional amendment would grant municipalities the legal standing to file Direct Actions of Unconstitutionality (ADI) directly with the Supreme Federal Court (STF) to challenge laws that negatively affect their budgets.