The Survey Profile of the Brazilian Municipalities – Public Finances that analysed the incomes and expenses of all of the Brazilian municipalities, from 1998 to 2000, unveils that, in three years, the average annual expenditure per capita with education passed from R$ 134.00 to R$ 166.00. The raise in expenditures was observed in all the different sizes of the municipalities regarding population. In the smallest municipalities, with less than 5 thousand inhabitants, the percentage of those that spent more than R$ 250.00 per capita with education doubled, recording 48% against 22% in 1998, which means that almost half of them spends more than this value.

By the other hand, as the population of the municipalities increases, the less is spent per capita with education. Among the municipalities with more than 500 thousand inhabitants, 38% spent up to R$ 70.00 per capita. Among those of smaller size only 7% spent up to this value.

The survey also shows that in the Northeast, 15% (the highest percentage between the regions) of the municipalities spend more than 45% of its available income with education.

Regarding the expenditures with sanitation, although they increased during the three years, the commitment of the municipal administrations with it is smaller than with education. While with education the town halls used from 25% to 45% of their incomes, with sanitation the expenditures ranged from 7.5% to 25%. In 2000, 29% of the Brazilian municipalities spent more than R$ 105.00 per capita with health and sanitation, but 26.8% spent up to R$ 55.00.

The majority of the Brazilian municipalities have a great dependence on the transfers of resources mainly of the FPM, Fundef and ICMS

 he collected revenues by a municipality show its degree of autonomy. The dependence on the transfers from the state and federal government decreases as the volume of collected tributes increases. The Survey Profile of Brazilian Municipalities showed that as the population of a municipality increases, the larger is its tributary revenue.

The entirety of municipalities with more than 500 thousand inhabitants, that amounts to 0.5% of the municipalities, had 61% of the total tributary collection of the country, while the municipalities with less or equal to 5 thousand inhabitants, amounting 25.6% of all the municipalities, had 0.7% of the tributary revenues of the country.

The revenues that come from the transfers, which are the resources appointed to the municipalities and that have as the main source the federal and state governments, have a behavior that is opposite to the tributary revenues. While the revenues are mainly concentred in the Southeast, the current transfers aid the less developed regions of the country such as the North and the Northeast, functioning as the main mechanism of resources redistribution.

In the current transfers composition, stand out the Municipal Participation Fund (FPM), the Elementary School Maintenance and Development Fund and Professorship Valorization (FUNDEF) and the Tax on Circulation of Goods and Services (ICMS) that, altogether, amount to 72% of the total of the transfers to the municipalities.

According to the survey, while the FPM can be mainly observed in the Northeast Region, the largest volumes of resources of the Fundef and ICMS are verified in the Southeast Region.

When the distribution of these taxes is related with the participation of the population in each region, it can be observed that the FPM was the one that most functioned in a redistributive way. The North, Northeast and Central West Regions present a share of FPM higher than its participation in the population. In the case of Fundef, its distribution followed closely the distribution of population through regions. The ICMS had an opposite behavior in relation to the FPM, with the concentration in the Southeast being higher than the participation of its population.

Regarding the municipalities up to 5 thousand inhabitants, the FPM was responsible for 57.3% of the available revenues of their town halls. Its percentage reduced in the same proportion that increased the populational size of the municipalities, which shows that it is the main redistribution mechanism, aiding the less developed regions as much as the smaller Brazilian municipalities.

In the medium municipalities, those with a population between 100 thousand and 500 thousand inhabitants, 43.3% of its available revenues came from the ICMS. The Fundef was responsible for a smaller parcel of the current municipal transfers concentrating itself, mainly, in the municipalities with population between 5 thousand and 100 thousand inhabitants.