How to cut spending and reduce taxes at City Hall | Councilor Pedro Duarte

Just like in our homes, where we need to control expenses to avoid running out of budget, City Hall also needs to manage its resources responsibly. Public money, resulting from the taxes we pay, finances essential services, such as health, education and security. But is there room to reduce taxes without compromising these services?

To better understand, let’s analyze where City Hall’s money comes from. We all contribute, directly or indirectly, to taxes and fees. The IPTU, paid by property owners, and the Garbage Tax represent 11% of revenue. The Executive Branch also collects other taxes, such as the ISS; with the sale or rental of assets; with transfers from the State and the Union; and with credit operations, such as loans.

Based on this collection, the City Council defines its annual budget. Without exceeding the expected maximum collection, unless there is accumulated cash from previous years. This is what happened in 2023, when City Hall spent more than it collected, thanks to accumulated money, mainly due to more than R$5 billion from the CEDAE grant.

Considering that, apart from the Gentileza Terminal, this expenditure above that collected did not result in major investments in 2023, the question arises: is there room to reduce taxes without compromising essential services? To give an example, an 8% reduction in IPTU would require a cut of R$390 million in expenses. High value? Not for a City Hall that has been creating questionable expenses.

An example is RioEventos, responsible for the convention center (under private management for over 20 years). This state-owned company has 52 appointees in a space that barely accommodates 10 people, with poorly defined functions and a budget of R$37.8 million. I also mention specific projects, such as Rio Em Forma, from the Sports Secretariat, which consumed R$98 million and was investigated by TCM.

Other questionable expenses are in special departments created under the current administration. I highlight the R$112 million from Community Action planned for 2024. Or the R$73 million from Metropolitan Integration, responsible for the Integra.Rio project, which financed dubious projects in 2022 (barbershop services in Carapebus and a show in Macaé) and named more of 200 people, many of them from other cities,
already at the gates of the electoral period. Lastly, the Youth portfolio (R$54.7 million).

Furthermore, we can reduce spending on property rentals by at least 50%. This would generate savings of R$30 million. It makes no sense for the city hall to pay extremely high rents to third parties, when it could use its own properties that are abandoned in the city today. Adding these cuts, we reach R$405 million, enough for an 8% reduction in IPTU.

There are other ways to save, such as selling these abandoned properties, concessions, reducing commissioned positions, improving bidding and efficiency gains. With creativity and responsibility, it is possible to reduce expenses and reduce the tax burden. And you, what would you do to make city management more efficient? Popular participation is essential to ensure that public money is used
the best way possible.