Despite no constitutional spending mandates, states increase investments in public security amid rising concerns

08/30/2024

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Ursula Dias Peres — Foto: Silvia Zamboni/Valor

Despite the absence of budget allocations tied to specific revenue sources and the urgency highlighted by public opinion polls, public security has become an increasingly significant area of expenditure in Brazilian states. In recent years, spending in this sector has grown at a faster rate in real terms than the overall state expenditures.

In the first half of 2024, the combined security expenditures of Brazil’s 26 states and the Federal District amounted to R$55.76 billion, marking a 14.2% real increase compared to the same period in 2018. During the same timeframe, the total aggregated state spending rose by 9%. Meanwhile, education and healthcare expenditures saw even more significant increases of 36.5% and 37.4%, respectively.

Public security, education, and healthcare constitute the trio of state public services with the highest spending volumes. Together, they represented 37.2% of total state expenditures from January to June 2024. Among these three sectors, security is the only one without constitutionally mandated spending, which partly explains why its share of total state expenditures has grown less than that of education and healthcare.

Security spending accounted for 8.7% of total state expenditures in 2018 and 9.3% in 2023, but the share declined slightly to 9.1% this year, with a cumulative increase of 0.4 percentage points over the period. In contrast, education’s share increased to 15.1% in 2024 from 12.1% in 2018, and healthcare’s share grew to 13% from 10.3%, reflecting respective increases of 3 and 2.7 percentage points, always considering the expenditures of the first semester. Part of the spending in these three areas came from a reduction in Social Security expenditures, which decreased to 16.7% from 18.6% of total state expenditures between 2018 and 2024.

The data, which includes both current expenses and investments, were sourced by Valor from the summarized budget execution reports submitted by the states to the National Treasury. The figures were extracted between August 8 and 12 and include only settled values, excluding intra-budgetary expenses.

Experts point to several contextual factors, such as the COVID-19 pandemic and the significant revenue increases experienced by the states in recent years, to explain the current expenditure landscape in key state-provided services.

In the realm of public security, the data shows substantial spending despite the lack of mandatory allocations, as seen in healthcare and education, according to Ursula Dias Peres, a public policy professor at the University of São Paulo (USP). “There is a pressing need and substantial budgetary commitment in security, with funds coming primarily from state treasuries rather than dedicated funds,” Ms. Peres said. However, she noted significant variation among the states.

Minas Gerais, São Paulo, and Rio de Janeiro are among the states with the highest absolute expenditures on public security. In the year’s first half, Minas Gerais spent R$8.78 billion, São Paulo R$7.47 billion, and Rio de Janeiro R$7.44 billion.

Although the absolute spending figures are similar, São Paulo has a significantly larger population than Rio de Janeiro, said Vilma Pinto, head of the Independent Fiscal Institution (IFI), a Senate-affiliated fiscal policy watchdog. According to the Brazilian statistics agency IBGE, São Paulo is home to 44.4 million people, while Rio de Janeiro has 16.1 million. “Thus, the per capita expenditure in Rio is higher than in São Paulo. However, we also need to assess the efficiency of resource use. The discussion should not only focus on the level of spending but also the quality of those expenditures,” noted.

The study also reveals significant differences in the spending structure. In Minas Gerais, security expenses account for 18% of total state spending. In São Paulo, the figure is 4.7%, and in Rio, it’s 15.1%. The shares of education and healthcare expenditures also vary among the three states, though to a lesser extent. São Paulo allocates 16.1% and 10.5% of its total spending to education and healthcare, respectively. In Rio, the shares are 8.2% and 8.6%. In Minas Gerais, these figures are 15.7% and 12.3%, respectively, for the first half of 2024.

Ms. Peres attributes the heterogeneity in public security spending to the current sector management. “The Unified Public Security System (SUSP) exists in law, but the states, responsible for 80% of the financing, are the primary operators of public security. The federal government doesn’t have the same influence as it does in healthcare, education, or social assistance,” she said.

“Each state implements its own policies, with vastly different governance in public security, policing strategies, salary structures, and approaches to repression or intelligence work, including the use of body cameras. The federal government is trying to regulate these areas now, but the differences remain stark. This disparity in governance is reflected in the budgets,” Ms. Peres noted.

Minas Gerais often includes pension costs for civil servants in its security spending, which can inflate its expenditures relative to other states that do not follow the same accounting practice, Ms. Peres said. In a statement, the Minas Gerais government said the state’s public security spending includes the costs of retired military personnel, as they do not retire but rather enter a remunerated retirement status at the end of their service period as prescribed by law.

Ms. Pinto highlights that the SUSP was created in 2018. “However, there are challenges in realizing the institutional potential of this tool. There needs to be an effort to improve the governance and efficiency of these expenditures,” she said. Ms. Pinto also noted that public security has become a more recent topic of debate, driven by public opinion polls revealing widespread feelings of insecurity among the population.

In Rio de Janeiro, the lack of a comprehensive public security policy explains the high expenditures in this area, said sociology professor Daniel Hirata, from the Fluminense Federal University. He said that the state’s strategy relies heavily on police operations. Mr. Hirata added that, when analyzing police lethality, most deaths in São Paulo occur during robberies and chases. In Rio, however, lethality is higher during police operations, an “indication of the central role these operations play in the state’s security strategy.” These operations, he noted, are “extremely costly,” requiring large numbers of personnel, heavy weaponry, vehicles, and technology. “These operations are necessary. The problem is that they have become routine and the primary tool of public security, leading to very high costs,” he added. In Rio, “we are addressing symptoms rather than the root of the problem,” he said.

Overall, Ms. Peres said, there is low investment in intelligence and investigative policing. “This has led to a very complex situation today, with significant increases in crimes against assets and swindle. Our police are not focused on these issues. We have an overt police force dedicated to combating street violence and drug trafficking, but not investigative intelligence. We are facing more scams, including crimes committed via mobile phones and the internet. Addressing this requires investment in software, monitoring, and specialized training.”

A review of the sub-function data for public security expenses reported in the fiscal reports shows that, on average, 29.3% of spending in this area goes to policing across the 26 states and the Federal District. The sub-function “information and intelligence” accounts for only 2.4% of the spending. “This is very low, even though the public often demands police presence. People want to see patrols,” Ms. Peres noted. “Administratively, it is easier to spend on personnel than to manage complex bidding processes for contracts that require specific management.”

According to the 2024 Brazilian Public Security Yearbook, the swindle rate per 100,000 inhabitants increased by 8.2% in 2023 compared to 2022, while the rate of electronic swindle rose by 13.6%.

In a statement, the Rio de Janeiro government said that public security consumes a larger portion of the budget due to payroll expenses for security forces and the prison administration, “without compromising investments in health and education.” The statement noted that more than R$4 billion has been invested in the current administration, focusing on police technology and modernization. Rio, the statement said, is the state that has acquired the most body cameras for police forces—more than 13,000 units have been installed in the Military Police alone—and will soon have over 5,800 security force vehicles equipped with onboard cameras.

In a separate statement, the São Paulo government emphasized that it is among the leaders in security investments, with over R$15 billion allocated in 2023. In volume, this is nearly 15 times the amount invested by states allocating around 10% of their budget to security. The statement also highlighted that total expenditures on security, prison administration, and Fundação Casa (an institution for juvenile offenders) amounted to R$11 billion, equivalent to 6.9% of the state’s total spending.

Unlike other states, the statement added, São Paulo’s debt service payments to the federal government account for a significant portion of settled expenses (7.9%). Additionally, transportation costs (6.4%) are significant in São Paulo due to its extensive road network, which is less of a factor in other states, many of which rely more on federal highways. “These are specific characteristics of each federation unit, which do not indicate low values allocated to the sector,” the statement concluded.

*Por Marta Watanabe, Rafael Rosas — São Paulo, Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/