Participation, education
Onen anvernment and radical Open government and radical policies have made the Workers Party municipal government in Porto Allegre a success story within Brazil. Mayor Raul Pont made the following report to the neighbourhood meetings which are now preparing the year 2000 participatory budget.
The solid support of the population has enabled the Workers Party (PT) administration of Porto Allegre to reform taxation, and win a greater share of tax revenues collected by the state government. The result has been a 300% increase in the city budget since Olivio Dutra became the first PT mayor of Porto Allegre in 1989.
Direct income now represents over half the city budget. The tax collection rate is 88%, one of the highest rates in Brazil's major cities.
The problem is that Brazil's federal government takes 56% of the total tax 'pie," and the state takes 27%. This leaves Porto Allegre with only 17% of the total taxation paid by residents and companies in the town. Transfer of services
As it applies the IMF programme, the federal government is transferring some services to the states and municipalities. Though normally without transferring the necessary resources. The responsibility for health care has been transferred to the municipalities but the Federal Government has ignored its promise to increase its transfer payment accordingly. Porto Allegre's health budget has not increased, despite the growing number of patients, including a growing number from less fortunate parts of the state. To make matters worse, the federal and state authorities have transferred hundreds of health care workers out of the services which are being municipalised.
In the education field, the municipality now shoulders the entire burden of preschool services.
At the beginning of 1999 the federal government suspended its programme financing housing and public hygiene. According to Pont, "popular pressure on the federal government would make it possible to reverse this tendency."
Despite the clear demand of the participatory budget for increased social services, and anti-poverty programmes, the federal government has abandoned this sector. The few federal programmes 22 International Viewpoint #312 June 1999 which survived have been cut by 33%.
The federal government has also transferred responsibility for tratfic control and taxation to the municipalities, but not the lucrative sector of vehicle inspection and licensing, which it intends to privatise.
Despite these problems Porto Allegre is one of the few Brazilian cities with a balanced budget. This has enabled the municipality to borrow money on the open market to finance essential programmes. As with every other area of the municipal budget, the terms and conditions of these loans are transparent, and have been approved by the population.
District-level discussions on the 2000 budget have already started. According to Pont, "we won't be able to satisfy the population's demands unless we confront the central thesis of the federal government and its neoliberal policies: cutting social costs, reducing the number of civil servants, and cutting their wages.
In ten years of our participatory budget, we have never heard the population call for or suggest a reduction in the number of civil servants. On the contrary, at each assembly we hear calls for more professionals; more doctors, nurses, teachers and social workers. More professionals to work in and expand our health centres, and to staff the new schools which the participatory budget has decided to build.
Of course, we are committed to maintain our policy of inflation-proofing the salaries of public servants, to protect their buying power, and prevent them becoming victims of inflation.
It is still possible to increase our resources. The town hall must work together with the participatory budget system to impulse a new discussion of the municipal rates (a tax based on property values). In 1997, against the will of the participatory budget delegates, town counsellors who supported the federal government refused to approve the modernisation of this tax which the executive had presented, in response to a clear demand from the participatory budget delegates.
But all these changes will be insufficient if we do not change the federal government's economic model of recession and total submission to the IMF and the major banks. Without economic growth, there will be no new jobs, and no new resources. The model must be changed. Not just for these reasons, but also because the hidden consequence of recession is that all the disposable resources of the federal administration are not redistributed in the
T Ric bu po pa ha tio The ge dee ter form of public works and services, but rar used to enrich the world's richest sub speculators, through payment of interest cor on the state debt. A policy clearly to the T detriment of the Brazilian people. cor
This is not the only possible policy. It of is possible to have a federal government in which has a balanced budget, like we we have here in Porto Allegre. It is possible sev to have a federal government with a spil wages policy, with the ability to invest. A of federal government which does not in relinquish its tax income through excep- res tions and tax breaks of all kinds, but Cut which assembles the necessary resources "Tr to implement the democratic decision of ren the community.
Building this new model means closing ranks in the struggle for national aut soverignty, against subordination to the Co foreign debt, and in favour of policies of Cos income generation, employment, defence to of the domestic market. A truly sovereign ma government. Not like the current federal Ma administration. ma
It is not true that taxes in Brazil are pro excessively high. The total tax burden is the about 30%—in some European countries ba: it exceeds 40%. And in Brazil, the tax ob base is extremely unjust. The richest pay au nothing, or very little. Most taxes are on obs consumption, rather than income, wealth, capital or inheritance. To make matters ind worse, the federal government has tio encouraged the states into a tax war, each org promising greater and greater tax reduc- A tions. Thus is yet another way of trans- the ferring resources from the population to *sO the major companies. pal
As we begin debate on the 2000 the budget, the town hall calls on all citizens tiv to join the struggle to increase the share of public resources which are adminis- of tered by the municipalities. This is the best way to guarantee that our demands for public works and services will be met de and to begin to change this unjust economic model which is leading the country into recession and unemployment. * * Except from the municipality's letter distributed to participants in the first round of local participatory budget meetings.