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States’ Revenues Fall to 8.4% of GDP in 2026, CIEP Finds

Reliance on federal transfers leaves local budgets exposed to swings in national revenue.

Overview

  • - Federal transfers, known in Mexico as federalized spending, total 2.8 trillion pesos in the 2026 budget and account for 81.7% of state income, according to the CIEP analysis.
  • - States’ own-source revenue has inched up only to 1.4% of GDP from 1.2% in 2018, showing weak progress in building local tax bases.
  • - The CIEP projects a 4.7% rise in locally raised revenue in 2026, led by Nuevo León at 37.0%, Colima at 29.0% after adding a green emissions tax, and Durango at 18.6% on higher fees for public works and services.
  • - Dependence varies widely: Guerrero, Veracruz, and Tlaxcala rely on the Federation for 96.6%, 92.7%, and 92.5% of their budgets, while Mexico City, Sonora, and Nuevo León are less reliant at 48.7%, 66.2%, and 67.1%.
  • - The CIEP warns that states risk shortfalls when national tax or oil receipts slip and urges stronger payroll tax collection, targeted environmental levies, and modernized payment systems to lift autonomy and reduce volatility.