Governors of different political persuasions met on Tuesday at the Federal Investment Council (CFI), and have demanded a meeting with Javier Milei to address concerns over the president’s new economic measures.

Without questioning the fiscal balance, governors demanded a meeting with the National Government to discuss fiscal and tax issues. They also called for the revival of the “May Pact”, and Mendoza native Alfredo Cornejo will represent the provinces.

The representatives met under the pretext of discussing new financing tools to address infrastructure projects. However, with the shared concern over the collapse of federal revenue sharing and the tightening of its coffers implemented by the Milei administration, the summit resulted in a request for an audience with the National Executive Branch to discuss comprehensive tax reform and highlight the objectives signed in 2024 in Tucumán under the May Pact.

Among those present were Governor Buenos Aires Province Axel Kicillof, Buenos Aires City Mayor Jorge Macri, amongst governors from across the country.

During the meeting, which took place at Azopardo 750 — the temporary headquarters of the CFI while the Retiro building is under construction — the governors agreed to resume discussions on the May Pact, signed with the President, and nominated Mendoza native Alfredo Cornejo as the provincial representative. Furthermore, there was a majority consensus to sign the agreement with the National Government for the “mattress dollars.”

The summit was unique in that it brought together all the governors, regardless of political party. This is unusual because while a large portion of Peronism has severed ties with the Casa Rosada, other leaders are accelerating negotiations to reach electoral agreements with La Libertad Avanza in their districts. For example, eight governors who favored dialogue had an agenda today at Balcarce 50 to sign their adhesion to the Simplified Income Tax Regime and the government’s “mattress plan.” A political snapshot rather than a real one, as the provincial leaders mentioned at the CFI that the legal framework is the bill that must be passed by Congress. 

Other leaders even warned that they would no longer share information with ARCA, as in the case of Santa Fe, which stopped doing so in 2017 after a legal dispute.

The spokesperson for the meeting before the press was Ignacio Torres, from Chubut. “There is a context in which the government is proposing a discussion of tax reform with a reformist ethos, which obviously has a counterpart in the form of the sub-sovereign states; the provinces are bound by many of these reforms, so the idea is to revive the spirit of unity that the May Pact once established and hold this discussion jointly with the national government,” said the PRO governor. Torres was the one who announced the request for a hearing: “We live in a federal country; in many cases, the federalism proposed in the regulations is not reflected or is reflected poorly in educational, healthcare, and social asymmetries.”

Torres also clarified that there is an “opportunity” to “redefine a fiscal matrix that is fairer, that takes the brakes on production and labor.” “We understand that if we’re going to implement a tax reform, the provinces’ role must be united in whatever a potential law proposes. These reforms require qualified majorities. You can’t implement a true tax reform by decree,” the Chubut native clarified.

Another issue discussed by the governors was the need for a federal revenue sharing law. There was also consensus on the need to maintain fiscal balance and a floating exchange rate.

“The great challenge facing the governors and the national government today is to sit down and agree on basic points in an election year, which seems utopian. But I believe we can reach an agreement because otherwise it’s impossible to move forward. And the same thing always happens: we want to refound Argentina every four years, and we fall into a pendulum-like situation where nothing is ever resolved,” Torres concluded.

The Governors’ Meeting

In advance, one of the first to arrive was Alberto Weretilneck, from Río Negro, who stated: “The main purpose of this governors’ meeting was to evaluate the current fiscal situation of our provinces, considering the profound changes being implemented by the national government.” Weretilneck also stated that “these changes have had a strong impact on both our own revenue collection and the regulatory frameworks that have been in place until now.”

Before the meeting, a document circulated among some of these governors highlighting that, according to data from the Federal Tax Commission, automatic fund transfers to the provinces would decrease by 4.2% in 2025.

In detail, the provinces criticized the “tax policy decisions of the National Government” and pointed out that “the repeal of the suspension of exclusion certificates related to the collection of income tax and VAT; the modification of the calculation of advance payments for corporate income tax; the deferral of the update of the Fuel Tax; and the recent reduction and/or elimination of internal taxes on imported cell phones, televisions, and air conditioners” are some of the key issues.

Originally published on Ámbito