STF: states undergoing fiscal recovery can hold tenders – 07/04/2023 – Market

The STF (Federal Supreme Court) decided, by unanimous vote, that states that adhere to the Tax Recovery Regime can hold public examinations to fill vacant positions in the public administration.

The trial was held virtually, when ministers cast their votes on the court’s online platform, until last Friday (30). The process had been stopped since December 2021, after a request for a view (more time for analysis) made by Minister Alexandre de Moraes.

The ministers followed the vote of the rapporteur, Minister Luís Roberto Barroso. He had overturned excerpts from a law sanctioned by former President Jair Bolsonaro (PL) that dealt with limitations on federation entities that have an agreement with the Union to renegotiate debts in search of greater fiscal balance.

According to Barroso, the veto on hiring personnel limits the power of action of state and municipal governments and directly interferes with the continuity of public services.

He stated that there would be little left of the autonomy of states, the Federal District and municipalities if they could not even admit personnel to keep their staff stable when they adhered to the Fiscal Recovery Regime.

“It is not about creating new public positions here. It is exclusively about nominating new servants for vacant positions, with a view to the continuity of state and municipal public services”, he said.

The decision also authorized the exclusion of state and municipal spending ceilings on investments carried out with resources from special public funds.

Barroso considered that it is harmful to make it impossible to use scarce resources, which have a certain destination and could not be used for other purposes.

“Public resources with a specific destination, which could be used to improve essential public services to the population, will be paralyzed”, he said.

Special funds consist of a set of revenues that, by law, are linked to the achievement of certain objectives or services. For Barroso, submitting resources from special funds to the ceiling offends the principle of efficiency and does not achieve the objective of promoting fiscal responsibility.

The decision was taken in action presented by the AMB (Association of Brazilian Magistrates) and the National Association of Members of the Public Ministry.

The entities questioned several provisions of the law that instituted the Tax Recovery Regime. The regime was created in 2017 to provide instruments for adjusting public accounts to states with serious financial imbalance.

It offers relief in paying states’ debt to the Union and other creditors. On the other hand, the federation units have to adhere to fiscal adjustment measures.