The governor of Rio de Janeiro, Francisco Dornelles from the Progressive Party, PP, declared on Friday a "state of public calamity" over a major budget crisis which he said will prevent his government from "honoring its commitments" to hold the 2016 Olympics.
In response, state officials authorized the state to "adopt all necessary emergency measures to ration essential public services in order for the Rio 2016 Olympic Games and Paralympic Games to take place."
In an official written statement published Friday, the Brazilian lawmaker warned of a "total breakdown in public security, health, education, mobility and environmental management" due to lack of resources.
Earlier this month, Dornelles implemented a series of measures with the objective of saving between US$290 million to US$580 million. The state’s deficit, however, is approximately US$5.6 billion.
The economic decree, which will take effect in September, will result in cuts to important social programs, such as the Renda Melhor program, a complement to the federal Bolsa Familia program in Rio de Janeiro, which provides financial aid to poor Brazilians.
The measure issued also mandates that state agencies reduce their operational expenses by 30 percent, with the exception of the departments of health, education, public security and penitentiary administration.
In April, the state government announced that as a result of cash flow problems it would be unable to pay over 137,000 state retirees, delaying pension checks until May.