Nadin Argañaraz : President of the Argentine Institute of Fiscal Analysis (Iaraf)
An item with both economic and political edge is related to the degree of autonomy of resources that has a jurisdiction to carry out their public spending. In an election year like this, the question always arises as to whether the Argentine provinces depend more or less of the funds transferred by the national government. For the period 2003-2010 can be carried out by the provincial tax component analysis, comprised of both tax collection automatic shipments as the national government makes in federal revenue sharing and Federal Solidarity Fund (FFS).
The sum of these two sources, called the current tax revenue in the provincial accounts, represented in recent years an average of 80% of total provincial revenues. These revenues are characterized by a high degree of institutionalization, in the sense that they rely on provincial and national tax laws and the law of federal tax partnership. This adds interest to the analysis, because the autonomy that is analyzed is related to more automatic and predictability.
Following developments in provincial tax revenue flows over the past seven years shows that the provincial own revenue in the period grew at a rate of 25% annual average, while shipments federal revenue increased at an average annual rate of 26%. Following these behaviors, the provincial fiscal autonomy decreased between 2003 and 2010. In fact, 42% recorded for tax autonomy indicator in 2003 ($ 42 of every 100 originated as own revenue), it fell to a 40.5% in 2010. If income national origin includes the FFS, the indicator falls further, reaching a ratio of 39%.
While the total change is slight, half is explained by the fund established in April 2009 and which took full effect in 2010. Extreme cases, of course, are set within the jurisdictions in which the collection itself evolved differently than the average, resulting in an uneven situation the evolution of tax autonomy for each of them.
is interesting to note the two extreme cases. Tierra del Fuego was the most increased tax autonomy, moving the indicator from 23 to 34%. Salta was among the jurisdictions that became more dependent on national tax revenues, from the rate of 22 to 16 percent. Although described above that the tax component explained about 80% of provincial funding, a measure of provincial autonomy in fiscal matters should include all resources (tax and non tax), whether generated by each jurisdiction as those received from federal government. This involves adding resources that do not have the characteristics of automaticity and institutionalization of the cigar tax, such as non-automatic transfers Nation to carry out a public work or income from the sale of provincial assets. In this case, information is available only to full year 2009.
A key insight is that non-automatic domestic transfers grew at an average annual rate of 42%, generating an even greater relative decline of provincial autonomy. In fact, the indicator rose, in this case, about 47% in 2003 to 41% in 2009.
Paradoxes
Despite similar trends of the autonomy of the whole Curiously in this case, a province like Salta, which was the most increased their reliance on only consider tax revenues, the province becomes more increased autonomy to consider the totality of public resources. Conversely, provinces such as Tierra del Fuego and Santa Cruz, who appeared as the most had increased their tax autonomy, they become among the provinces more autonomy lost overall. Discretion The important role played by the discretionary resources sent by the Nation is shown in the fact that in 2003 accounted for 6% of total provincial revenues and in 2009 became equivalent to 12 percent.
What happened in recent years with the Nation-Provinces relationship makes clear the need to discuss thoroughly the share of resources that should be left to the national government and which should go to provinces. But also, this new system of sharing should be as automatic and predictable as possible. The scope for discretion should be reduced to a minimum, if what you want is that change is truly sustainable.
The Nation, 10-4 -11
