Nuevo León has the goal of staying at a green traffic light in the Alert System of the Ministry of Finance

Monterey, NL. For the first time and after six years of measuring the Alert System of the Ministry of Financein the second quarter of 2022 the entity was located at a green traffic light, which indicates sustainable financing, however it will have to remain at that level for a year so that its debt can be increased from 5% to 15% of the Free Disposal Income.

“We achieved it in the second quarter, it is almost a fact that we will achieve it again in the third quarter due to income seasonality, and debt, the challenge is to be able to close the year with a green traffic light, if we achieve it all year, it means that next year that we deliver the Public Account to Congress, the Ministry of Finance will see the information, assess it and until June 2023, you will know if you are in the green or not, ”he explained to El Economista, Carlos Garza IbarraSecretary of Finance and Treasurer General of the state.

He clarified that the intention is not only because they are going to increase the debt with respect to the Free Disposal Income (ILD), “it is because it puts us a little more in order, it is a healthy rule of compliance, coming to that, the debate is going to be if next year we are in the green, and if we are going to ask Congress to authorize it,” Garza Ibarra asserted.

The Alert System measures the level of indebtedness of Public Entities that have contracted Financing and Obligations, and these are registered in the Single Public Registrywhose source or payment guarantee is Free Disposal Income.

The Law of Financial Discipline of the Federal Entities and the Municipalities establishes three short- and long-term indicators to measure the Alert System:

1. Public Debt and Obligations on Free Disposal Income
2. Debt Service and Obligations on Freely Disposal Income
3. Short-Term Obligations and Suppliers and Contractors, less the amounts of cash, banks and temporary investments, on Total Income.

In 2015, the previous administration received a balance of debt plus obligations for 46,567 million pesos, with freely available income (ILD) for 33,207 million pesos, for which the debt/ILD was 140.2%, which was achieved decrease to 117.3% in 2016.

In 2020, due to the Covid-19 crisis, it rose to 121.5% and decreased until it reached 103.7% in the first quarter of 2022, with a yellow traffic light, while in the second quarter of this year it fell to 99.6%, with a yellow traffic light. green.

During the conferenceAdvances and Challenges in Financial Matters”, given by Carlos Garza at the IMEF International Forum 2022commented that in previous years there was a deficit, which went from -2,677 million pesos in 2019 to -5,057 million in 2020, due to health coverage in the face of the Covid-19 crisis, this deficit was reduced to -2,485 million pesos in 2021.

“The government was not in an optimal situation and we hardly had the resources to invest. The debt has grown as a well used lever, it is an instrument to bring things from the future, we did not have the resources to operate”.

He explained that there are those who beat their chests because they do not want to get into debt, however, with the pandemic and the water crisis, things have changed from one moment to another, however, the debt service must be paid and it cannot be lowered salaries to teachers, policemen and doctors.

Expense adjustments

As context, the official explained that there is little efficiency in the collection of property, since the amount that is collected is 50 percent.

On the other hand, he emphasized “it still hurts me that the possession had to be removed, it is 4,000 million pesos less than the budget. In addition, Nuevo León receives 87% from federal transfers, the rest is its own income, while other entities reach 97 percent.

“We are always thinking about how we can reduce spending, something we normally do is monthly or quarterly cuts of how spending is, spending programming depends on the executors.”

For example, spending is permanently monitored and what is not spent is saved as savings. In October, a cut is made to determine the budget for the following year and if, for example, the agencies spent 80%, that 20% is applied in the following year, which does not mean that the budget is being reduced, the state official clarified.