Report: Brazilian State and Municipal Education Funding Could Decrease by Billions in 2021

RIO DE JANEIRO, BRAZIL – The economic impact of the Covid-19 pandemic will lead to a reduction of between R$13 billion and R$40 billion in the budget linked to education in states and municipalities.

The estimates are presented in a report released on Wednesday, October 28th, by the ‘Movimento Todos pela Educação’ (All for Education Movement), Unibanco Institute, and National Council of Education Secretaries (CONSED).

The cut may aggravate the impact of the novel coronavirus on education, considering the modest actions of the MEC (Ministry of Education) to address the consequences of the pandemic.

The study outlines three scenarios for a drop in revenue in 2020, depending on the extent of the economic crisis, with reductions in the state and municipal tax burden of five, ten, and 15 percent.

The cuts in the budgets for Education would amount to R$13 billion in the first scenario, R$26 billion in the second and R$40 billion in the most pessimistic scenario – the amounts would be subtracted from a current scenario of approximately R$265 billion.

“Considering the total of 38.3 million students in these school systems, this would mean an average reduction in annual investment per student of R$345 in scenario A, R$692 in scenario B and R$1,038 in scenario C,” says the study.

States and municipalities are required to invest 25 percent of their revenues in education. The tax reductions lessen the minimum available for investment in the maintenance and development of education items.

The scenarios were drawn based on different projections by the Chamber of Deputies, the National Front of Mayors and the D3e education research institution. The study also analyzed the most recent data from the National Treasury on spending with the sector, which shows a more consolidated panorama.

“It is safe to say that, overall, the finances of state and municipal education systems are being severely impacted by the pandemic,” says the study. “After all, education financing in states and municipalities is essentially characterized by having as its main source a set of taxes with constitutional earmarks.”

The report updates other projections made throughout 2020. Mid-year, a study by the same institutions pointed to a potential loss, due to the pandemic, of between R$9 billion and R$ 28 billion in the states and between R$15 billion and R$31 billion in municipal networks.

With the most current data, the study found that 18 states and the Federal District had tax losses that are mostly linked to education – the largest occurred in Ceará, Acre, Rio Grande do Norte, Bahia, and Sergipe. Eight states saw a positive variation, with Mato Grosso, Mato Grosso do Sul, Pará, and Amazonas standing out.

MEC has been modest in its actions to assist in dealing with the impact of the pandemic, which has been the target of criticism from education secretaries. Only in October, eight months after the coronavirus reached Brazil, did the portfolio announce a specific budget line related to Covid-19, with a projected R$525 million to be sent directly to schools to support the return of in-person lessons.

The execution of the MEC budget is also precarious. The majority of spending in 2020 has been for commitments made in 2019 but not implemented under the management of ex-Minister Abraham Weintraub, and the ministry has not executed this year’s budget plan to provide internet to schools.

Without an emergency helpline for basic education in the pandemic, the Bolsonaro government has further cut R$1.4 billion from this year’s MEC budget by reallocating it to other areas. The impact of this cut is greater in basic and vocational education.

The new study estimates that total spending by state education secretariats on extraordinary measures to tackle the pandemic in 2020 will be at least R$2 billion, but could reach R$5.3 billion. Remote learning and meal maintenance measures, among others, are included in the estimate.

The budget for next year, under review in Congress, provides for a 21 percent reduction in resources for vocational and technological education programs and a seven percent reduction in the items entered as quality basic education.

With the new FUNDEB (Management and Development Fund for Primary Education), an increase in the complementation of the federal government of approximately R$3 billion is projected in 2021. The report points out that this will not be enough.

“Except for fiscal aid to basic education as early as 2020, the projected benefits with the new FUNDEB in 2021 will not be enough to offset the poor tax collection result, even in the most optimistic scenario,” says the text.

The main funding mechanism for basic education, the FUNDEB combines state and municipal taxes and is complemened by federal revenue sharing. This federal complement is currently of ten percent, increases to twelve percent in 2021 and reaches, in a phased way, 23 percent in 2026.

The FUNDEB represents R$4 in every R$10 spent on basic education in the country. With respect to resources linked to education, 63 percent comes out of the fund.

MEC was asked to comment on the report but failed to reply before this story was published. Still this month, when asked by the newspaper Folha de S.Paulo how to preserve the priority in basic education with reduced resources, MEC said that, in addition to the financial aspect, the portfolio has the role of providing technical assistance.

Source: Folhapress