Court declared the criteria for transferring money unconstitutional, but maintained rules in force to avoid insecurity in the distribution of resources
O Federal Supreme Court will analyze on Wednesday (June 3, 2026) whether to extend once again the validity of the distribution rules of the (State Fund and Federal District). THE The report is from Minister Cármen Lúcia.
One of the main sources of revenue for some States, the FPE brings together portions of taxes collected by the Union and passed on to state governments and the Federal District, with the aim of reducing regional inequalities and guaranteeing resources for the operation of public policies. In , what is being discussed now is the value division rule.
HOW IS IT DIVIDED
The State Participation Fund brings together 21.5% of the Union’s revenue from Income Tax and IPI (Tax on Industrialized Products), distributed among the 27 federative units.
The apportionment is redistributive: the larger the population and the lower the income per inhabitant, the higher the State’s share. Therefore, the Northeast dominates — alone, it accounts for almost half of the total (49%), and added to the North (28.7%) it exceeds 3/4. That leaves 11% for the Southeast, 6.7% for the Central-West and 4.7% for the South.
Using the 2026 coefficients, set by the TCU (Federal Audit Court)Bahia leads with 8.6%. At the other end are Santa Catarina (1.2%) and the Federal District (0.7%), which has the lowest share in the country. Here is it (PDF – 238 kB).
Here are the main states:
- Bahia — 8,6%;
- Ceará — 6.9%;
- Maranhão — 6.5%;
- Pernambuco — 6,4%;
- Pará — 6.3%;
- Minas Gerais — 5.0%.
THE JUDGMENT
In 2023, the Court declared sections of the (amended by )which deal with how the fund’s resources are calculated and apportioned. Despite this, the STF kept the rules in force until December 31, 2025.
The session on Wednesday (June 3) should define whether there will be a new deadline for the current rules to continue to be valid or whether another provisional solution will be adopted for the distribution of the FPE.
In practice, the Supreme Court will have to balance risks to prevent States from running out of criteria to receive resources; and on the other, prevent a rule already declared unconstitutional from being extended indefinitely.
outside the competence
The problem with this trial in the Supreme Court is that it falls outside the jurisdiction of the Judiciary. The National Congress should have issued a new rule by the end of 2025. However, as there was no move to do so, the Union asked the STF for a provisional solution on December 17, 2025.
The rapporteur, Minister Cármen Lúcia, partially accepted the request in February 2026, by extending the application of the rules for another 90 days, starting from March 1st, or until the issuance of a new law by Congress, if that occurred earlier. Read the (PDF — 184 kB).
The STF plenary endorsed this decision in a virtual session. As Congress did not present a proposal until this Monday (June 1), the Court returned to the topic.
RISK IN ELECTION YEAR
The lack of definition regarding the transfer criteria could increase pressure on Congress and state governments. The Supreme Court tries to prevent a legal vacuum in transfers without transforming the provisional solution into an indefinite extension.
The discussion will be a campaign agenda in the coming months, in which governors and congressmen will be directly involved in the electoral dispute and tend to resist changes that could reduce state revenues.
