Fiscal decentralization in Brazil has promoted a break in the national collection system and granted greater autonomy to states and municipalities against the federal government with regard to fundraising. The theoretical difference emerged, when one observes the greatest proliferation of local entities from the autonomy granted by the Federal Constitution (FC) from 1988 to the various levels of government, many of which almost totally depend on inter-governmental transfers. There are those who

more »

... advocate the strengthening of public actions from observing the problems of small units (municipalities) and who will now have greater decision-making freedom. Therefore, this article aims to analyze the public finances of municipalities in the core theoretical (all people born in Espírito Santo) state guided by the Fiscal Responsibility Law (FRL) and fiscal decentralization in the country. For this purpose, they were taken as the time frame 2001 and 2009. Methodologically, this paper used a literature review, as well as data from the National Treasury Secretariat (STN). In addition, authors took as a tool to help multiple regression models to strengthen the results. The principal evidence shows that, even with a slight improvement in the framework of indicators of revenue, these municipalities have proved essentially dependent on resources from the Union. Additionally, the results show a relative reduction of spending on items, such as staff costs and legislation in one year to another. In parallel, there were greater participation of the variables, costs of health and sanitation, education and culture, among others, to explain the variation of the expenditure of municipalities in Espírito Santo in the years observed. The data fit well to the model with a significance level of 1%.