Fiscal Deficit in Misiones: 2027 Budget Project Presented with a Shortfall of $787.5 Billion

Far from the main ideas about economic policy that Javier Milei's government intends to firmly establish regarding public account management, the governor of Misiones, Hugo Passalacqua, presented to the local legislature a 2027 budget project with a fiscal deficit of $787.596 billion.

As is customary, Misiones is the first province to submit its projections for the following year. This has consequences, as the numbers generally show significant discrepancies with what actually occurs.

In fact, the province is anticipating an estimated tax revenue without yet having the national government's projection on next year's inflation. It uses its own calculations. It is worth noting that Luis Caputo will present the national project on September 15.

Passalacqua proposes to his legislature expenditures of $5.2 trillion, of which $3.6 trillion correspond to the central administration and the rest to decentralized agencies.

On the other hand, on the revenue side, he estimates $4.5 trillion, of which $4.4 trillion corresponds to current resources. The rest consists of capital resources.

This results in a projected deficit of $787.596 billion. This shortfall represents 15% of the projected expenditures for the upcoming year. This implies that during 2027, Misiones will have to seek money in the market to cover the shortfall. The options include issuing bonds, bank loans, or delaying payments to suppliers and increasing floating debt.

It should be noted that in the calculation of resources, the tax sharing is included. This year, automatic transfers to the provinces totaled $1.4 trillion, reflecting a real decline of 1.2% compared to 2025. The provinces have received a total of $44.1 trillion so far, with a decline of 1.3%.

Analysts expect that in 2027, tax revenue will begin to recover because 2026 will leave a low comparison base. The requirement is that the part of the economy that is still dormant, such as industry and commerce, recovers alongside consumption and the increase in purchasing power of salaries.

In short, Misiones presents a strong contrast to Javier Milei's model, which seeks to prohibit the National Congress from approving budgets with fiscal deficits. For ideological reasons, the president considers this to be theft.

Pasalacqua justified the deficit budget based on the cuts in funds being made by the Nation. He directed his cannons against the national administration, accusing it of disfinancing various fronts, denouncing the "withdrawal of allocations and funds that began in 2024 and extended into subsequent fiscal years." In this regard, he referred to the interruption of the National Teacher Incentive Fund, the dismantling of essential health programs, including the disbandment of the "Remediar Program" - which has lost funding - the elimination of the transport compensatory fund, and the abandonment of federal road infrastructure financing, weakening the National Road Directorate.

He also spoke about "the reduction in the transfer of funds by the National Social Security Administration (ANSeS) to support provincial pension funds."