RIO DE JANEIRO?The governor of Rio de Janeiro decreed a ?state of public calamity? Friday, citing a fiscal crisis seven weeks before the state?s capital city hosts the Olympics.
The decree warned that the state?s ability to deliver basic public services to its 17 million residents?such as health-care, education, policing and sanitation?is under threat as it faces soaring payroll costs and Olympics-related investment.
The state government spent 9.77 billion reais ($2.8 billion), its biggest infrastructure investment in decades, on a 10-mile extension to Rio?s subway to link a series of wealthy beachside neighborhoods in time for the Olympics.
By declaring a state of calamity, interim Gov. Francisco Dornelles authorized his subordinates to adopt ?exceptional measures necessary for the rationalization of essential public services? to meet Rio?s commitments for the 2016 Olympic and Paralympic Games.
The move further allows the government to skip the bidding process to hire some contractors and loosens minimum spending requirements on mandatory items like education and health care. An official in Brazil?s Finance Ministry said the decree would also enable Rio to obtain federal resources more quickly.
Brazil?s largest oil-producing state, Rio has been hit especially hard by the commodity downturn that brought global oil prices from more than $110 a barrel two years ago to less than $50 today. But it also spent recklessly in the twilight years of the boom. Brazil?s Finance Ministry attributed fiscal troubles in a number of states to ?out-of-control personnel expenditures,? noting that Rio state?s government payroll more than doubled between 2009 and 2015.
Rio?s fiscal crisis has become increasingly apparent in recent months. Local news reports have told of hospitals reducing capacity and turning away ailing pregnant women because they weren?t ?at risk of death.? Dozens of schools have been occupied by students protesting weeks of canceled classes due to teacher strikes. With violent crime on the rise, Mr. Dornelles met with acting President Michel Temer earlier this week to request help from the military in securing Rio during the Games.
In May the state missed an $8.4 million payment to an international creditor, the French Development Agency.
The subway line is the only major Olympics-related commitment that Rio?s state government has made. Most of the sports venues and infrastructure projects are the responsibility of Rio?s city hall, which isn?t facing the same level of financial difficulties.
?The state of calamity decreed by the state government does not in any way delay the Olympic projects or the commitments assumed by Rio,? Mayor Eduardo Paes said in a post to his official Twitter page Friday. ?Rio city hall?s position is that of absolute fiscal and financial comfort.?
?Rogerio Jelmayer in S?o Paulo contributed to this article.
