The government’s projected budget (Republicans) for 2026, an election year, provides for revenue growth below the accumulated inflation in 2025. In addition, investments will be below the estimated amount for this year.
The total revenue of São Paulo in 2026 will be, according to the project, of R $ 382.3 billion, compared to R $ 372.4 billion this year. The rise is 2.65%, while the market expects inflation of 4.81% in 2025, according to the latest Central Bank Focus report. By comparison, the 2025 budget had grown 13.53% compared to 2024.
Public machine costing expenses will have greater weight in next year’s accounts, according to the project. In the 2025 budget, the projection of personnel spending and social charges was R $ 149.9 billion; For 2026, the forecast is R $ 159.3 billion (up 6.3%).
The Tarcisio government argues that next year’s budget brings balance between revenues and public expenses and that the relationship between investments and net current revenue is among the largest levels of the historical series.
The text sent to the Legislative Assembly of São Paulo projects that investments – expense that allows expanding the offer of public services – will fall to R $ 32.7 billion, compared to R $ 34.7 billion expected to 2025. The fall, in nominal values, is 3.5%. Applied inflation of the period, the reduction reaches 10.3%.
Tarcísio was elected with a platform that prioritizes partnerships with the private initiative to enable public works, and the 2026 budget reinforces this. The decrease in investments is pulled by the fall in direct application of resources in works, which will be retraction of 22%, from R $ 21.5 billion in 2025 to R $ 16.7 billion in 2026.
On the other hand, the forecast of transfers to private partner companies or state -owned companies should rise from $ 13.3 billion to $ 15.6 billion. These resources also need to be allocated to works.
The Executive Secretary of Finance and Planning, Rogério Campos, argues that the choice for expenses via private partnerships, focused on structuring works, results in more qualified investments.
“I can spend $ 8 billion from PPPs making an agreement with city halls, in a specific year, to build a portico. It’s investment,” he says to Sheet. “But in terms of size and quality, it seems to me that it improved [a alocação de recursos]. We have been making a larger dimension of more qualified investments. “
Among the main works provided for in the 2026 budget, are R $ 5.4 billion for the subway, R $ 850 million of transfers to CDHU (housing) and R $ 3.1 billion for the Secretariat of Partnerships in Investments. The construction of the new state administrative center in Campos Elíseos, in the center of the capital, should receive R $ 733 million.
The two works with the highest history of delay in the state, the 17-Ground monorail, on journalist Roberto Marinho Avenue, and the northern stretch of the Rodoanel, will have R $ 1.6 billion and R $ 403 million, respectively.
The government also foresees a leap in the SP Supercoming Program, a brand that Tarcisio seeks to put on the social area to counteract Bolsa Familia, linked to the PT. The program should receive R $ 643 million.
In 2025, the state granted benefits to 40,000 families in socially vulnerable situations. For 2026, the projection is to expand the benefits to 264 thousand families – nor six times the previous number.
Weak collection in the second half of this year, final stretch of the pre-election period, according to the Sheet published. Campos admits that the scenario is adverse and attributes the case to the economic conjuncture.
“In my tax management report, I have already explained that economic activity is weaker and the collection has been slightly below the estimate. So, probably, I close the 2025 performed below the revenue provided to some extent,” he said.
It attributes performance to factors such as the high interest rate of the Central Bank, which brakes private investments.
“The productive sector to invest at such a high rate, a very expensive investment vector, the opportunity cost of very high money,” he says. “We have a difficulty in our productive matrix, which is the transformation and capital goods industry. On the other hand, industry also matters less, which affects the collection.”
Campos states that the government has adopted measures to maintain fiscal balance. Current revenues – out of tax collection – are expected to rise 4.1% in 2026, from R $ 350.2 billion to R $ 364.4 billion. Current expenses – which include personnel and service maintenance – should grow 2.8%, from R $ 139.9 billion to R $ 148 billion.
“I have a greater growth of revenue than current expense, which is positive. It generates cash and allows me to make investments,” he says.
According to the government, personnel spending grew at a pace near inflation (servers had a 5% readjustment this year) and the state lost federal transfers to pay education professionals.
Campos adds that the forecast is that investments represent 11.5% of the state’s net current revenue – the collected minus mandatory transfers and extraordinary revenues.
In the last ten years, according to the secretary, only in 2021 and 2022, when the pandemic allowed special rules for spending expansion, this ratio was above 10%.
In the message sent to Alesp, Tarcisio makes indirect references to the sanctions imposed on Brazilian products by the government by describing the economic environment, but also launches indirect criticisms of conducting the federal fiscal policy of the government. The US is the main destination of São Paulo exports.
Tarcisio has even dressed a cap in support of Trump and, after the tariff, amid political wear and tear, oscillated the endorsement to the American, messages to the judiciary and criticism of Lula.
The governor states in the text to Alesp that “global economic perspectives are becoming increasingly challenging” and “there is strong evidence of the permanence of important fluctuations in the new dynamics of the world economy, with the intensification of geopolitical tensions.”
Then he writes: “It is true that the effects of this picture may be particularly serious for the delicate national economic scenario, in view of the already debilitated and serious fiscal situation in the country.”
State deputies must propose changes in the text sent by Tarcisio and have until the end of the year to vote the proposal.
