Municipalities warn they cannot pay Christmas bonuses: Luis Caputo pressures them to continue adjusting

As the June Christmas bonus payment date approaches, numerous municipalities are facing serious difficulties in ensuring compliance with this obligation. In response to growing concerns from various localities, Economy Minister Luis Caputo warned that there will be no further assistance from the National Treasury and urged provinces and municipalities to reduce their spending.

"We have already made our maximum effort from the Treasury. Now the challenge lies in growth and in getting provinces and municipalities to assume their share," Caputo stated. This statement comes in a context of sharp fiscal contraction: federal revenue sharing with the provinces fell 19.4% in real terms in the first quarter of 2025.

Faced with this, Governor Axel Kicillof requested authorization from the Legislature to borrow the equivalent of $1.045 billion, warning of the difficulties mayors face in meeting salary and bonus payments. According to the provincial Minister of Government, Carlos Bianco , many municipalities are already paying salaries in installments and anticipate greater difficulties in making their bonus payments on time.

Furthermore, Bianco noted that the cuts imposed by the national government are severely impacting local finances , not only due to the reduction in revenue sharing, but also due to changes in the collection systems imposed by the Customs Collection and Control Agency (ARCA).

In Villa Gesell, Mayor Gustavo Barrera declared a state of economic emergency to streamline administrative procedures and provide more flexible measures. In Saavedra, local mayor Matías Nebot announced a 13% salary reduction for officials and council members and is promoting a similar measure for municipal workers, aiming to avoid salary arrears.

Meanwhile, in Guaminí, Mayor José Nobre Ferreira implemented an austerity plan that includes reducing overtime to a minimum, freezing the salaries of political officials, and suspending subsidies to intermediate, social, and educational institutions.

In addition, the mayor of the Corrientes municipality of Caá Catí, Jorge Meza , said that there was a "30% decrease in the resources that the municipalities receive," something similar to what Rodrigo Aristimuño, mayor of Coronel Rosales, reported in recent hours, according to NA.

In some provinces, shared funds represent up to 75% of the budget. Governors have expressed their displeasure over the fact that while shared taxes are being adjusted, taxes for the exclusive use of the nation are not being touched.

In this way, the municipalities are demanding more assistance from the State because not only can they no longer carry out public works, but they are also forced to pay their workers' Christmas bonuses, something the federal government is asking them to resolve, either through layoffs or by obtaining the money themselves.