New state participation fund’s apportionment criteria: effective or innocuous?
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Abstract
The promulgation of LC No. 143 of 2013 met STF determination that ruled unconstitutional the criterion of apportionment of State Participation Fund (FPE) provided in LC No. 62 of 1989. The new rule - a hybrid model, which provides for dynamic sharing only in specific situations - has passed to be in force in 2016, little altering the distribution of the fund across the states since then. If in a recessive scenario the behavior of FPE distribution occurred in this way, how would it respond in other scenarios? It is possible to obtain patterns of behavior of this distribution according to different future macroeconomic scenarios. The purpose of this article is defined here: to verify how the future apportionment criterion of FPE would behave, from the construction of diverse economic environments - from pessimistic to optimistic. - and the simulation of fund distribution in these environments. The simulations were carried out based on market expectations about the behavior of Gross Domestic Product (GDP) and Broad Consumer Price Index (IPCA) in the future and under different hypotheses of tax elasticity with respect to GDP. The results showed that the changes would be marginal in the short and medium term, requiring at least a century to effect a complete transition from the static criterion to the dynamic apportionment criterion, even considering the most favorable economic scenario.
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