Rio Governor Pezão Announces Budget Cuts at Inauguration

By Lisa Flueckiger, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Luis Fernando de Souza, known as Pezão (Big Foot), was sworn in as Rio de Janeiro’s state governor on Thursday, January 1st together with his running-mate and now vice-governor Francisco Dornelles at the Rio state parliament Alerj. In his inauguration speech Pezão already announced budget cuts, although he promised to spare healthcare, education and public security, as well as transportation infrastructure.

State secretaries will have to cut costs heavily and reduce their spending by around 20 to 25 percent in 2015 according to the governor. The payment of commissioned work (positions not occupied by civil servants) will have to be cut by 35 percent.

Specific measures to achieve the budget cuts will be announced in a decree on Tuesday, January 6th, but Pezão already announced that all government contracts, such as for telecommunications and rental cars will be analyzed for their spending potential. The state secretaries will receive guidelines on how to revise their expenses.

Only healthcare, education, public security and transportation infrastructure projects will be exempt from the cuts and receive extra public spending in 2015.

“The mission that I am taking over is not easy, but it’s a noble task. I want to keep everything we have achieved in the last eight years and even go further. We will work a lot and this also includes the secretaries. I want them to be dedicated, like I am, to every fluminense city,” Pezão stated.

Even though Rio de Janeiro state will lose income of around R$2 billion of oil royalties in 2015, Pezão promised that there won’t be any tax increases. He intends to introduce several measures to increase revenues and is willing to renegotiate the state debt, which is currently at R$64 billion.

For the four areas spared from the saving, Pezão already announced projects and policies he intends to implement in his term. The biggest amount in the company’s history, R$3.2 billion, has already been transferred this week to CEDAE, Rio’s water treatment agency for the construction of Guandu 2. The new water treatment facility will guarantee the water supply for three million people around the Baixada Fluminense.

Guandu 2 will receive another R$400 million from the country’s government to fund the facility that will treat 12,000 liters of water per second and will have a reservoir of 57,000 liters. It will complement the already existing Guandu 1, Rio’s main water treatment facility today.

Regarding public safety, Pezão praised Security Secretary José Mariano Beltrame for his efforts and promised heavy spending in the area. One of the projects is the creation of mini-UPPs, smaller units that ensure permanent dialogue with the communities. The first of these was installed on Friday (January 2nd) in Itanhangá.

Further focuses in security will be the introduction of battalions in Araruama, Itaguaí and Nova Iguaçu, the modernization of Rio’s police units, as well as improving the UPP program and creating new housing for policing professionals.

Another focus in the new year, next to a Metro line between São Gonçalo and Niterói, will be the roads in Rio state, which are in a “precarious state” according to new Transportation Secretary Carlos Roberto Osório. A bidding process will be launched in the first semester of the year for the improvement of the 7,000 intermunicipal roads, which is currently in preparation by the FGV think tank.

Governor Pezão had already taken over the governor position from Sergio Cabral in April 2014, whom he also honored in his inaugural speech. He was confirmed as the head of Rio state in last year’s October elections.