Stagnation of the FASP Puts State Finances Under Pressure Amid Rising Insecurity
Federal funding allocated to states for public security through the Public Security Contributions Fund (FASP) has remained virtually stagnant since 2010. After a real increase of 4.2% in 2023, growth in 2024 was a mere 0.1% annually, and from January to September, the real advance was 0.0% compared to the same period of the previous year, according to figures from the Secretaría de Hacienda (Finance Ministry). This lackluster performance is taking place in the context of high crime rates and recent episodes of violence, such as the murder of Uruapan, Michoacán’s mayor, Carlos Manzo. Meanwhile, the federal government announced the Michoacán Plan for Peace and Justice with an investment of 57 billion pesos and the deployment of over 10,000 army and National Guard personnel.
The FASP is part of Budgetary Branch 33, but unlike other funds, it does not have an automatic formula linked to the Participable Federal Revenue; its amount is decided each year through the budget process. For 2026, 9.95 billion pesos are projected—just 1% more than in 2025 and still 29% below the real peak reached in 2014. In some states, like Michoacán, the share of FASP resources within the total allocation has decreased between 2010 and 2025. The elimination in 2021 of FORTASEG—the fund aimed at municipalities—increased pressure on local finances, as many local governments were left with less room to strengthen community policing.
By law, FASP resources are earmarked for professionalizing personnel, equipment, databases, justice infrastructure, and the penitentiary system. However, annual uncertainty over the fund’s growth makes multi-year planning for police and technology capacity difficult. Audits have highlighted delays and under-expenditure in some security programs, while inflation and currency depreciation have driven up the cost of specialized equipment and infrastructure, eroding states’ purchasing power.
The underlying issue is fiscal. In recent years, social spending and flagship infrastructure projects have absorbed more resources, while structural expenses such as pensions and financial costs have restricted budgetary room. With moderate oil output and a narrow tax base, the federal government seeks balance among investment, social support, and fiscal stabilization. For the states, the challenge is even greater: on average, over 80% of their income comes from federal transfers, while low local collection from property and vehicle taxes limits their ability to make up for cuts or stagnation in earmarked funds.
Public security has become a critical economic variable. According to the National Survey on Victimization (ENVIPE), crime victimization rates rose from 30,535 to 34,918 crimes per 100,000 inhabitants between 2010 and 2024, with significant regional gaps: states such as Querétaro, Puebla, State of Mexico, Colima, Morelos, Mexico City, Tlaxcala, Michoacán, San Luis Potosí, and Chiapas recorded higher increases, while Aguascalientes, Chihuahua, Sonora, Nayarit, Coahuila, Guerrero, Baja California, Yucatán, Sinaloa, and Nuevo León saw declines. The perception of insecurity in municipalities also increased, from 60.3% in 2011 to 64.7% in 2025. These indicators impact operational costs, logistics, and investment decisions, especially in manufacturing and export corridors tied to nearshoring.
Going forward, analysts highlight at least three key areas: setting clear, multi-year rules for FASP to provide certainty for state planning; rebuilding municipal capabilities after the elimination of FORTASEG, with standards for professionalization and evaluation; and improving spending efficiency through consolidated purchases, interoperable technologies, and performance metrics. In parallel, a subnational fiscal strengthening agenda—improved property taxation, cadaster updates, and fiscal cooperation—could increase local margins without hindering economic activity. Coordination with the National Guard and alignment with industrial and infrastructure strategies are critical to leverage investment and mitigate risks.
In summary, the relative freeze of the FASP coincides with mounting security demands and tight public finances. Without a roadmap that combines predictable budgetary rules, stronger local governments, and performance evaluation, the gap between needs and resources could grow wider, raising costs for investment and regional growth.
Final observation: Security has become a true economic determinant. Ensuring its funding—with clear rules, operational priority and improved local revenue—will be decisive to sustaining investment and employment in the states, without compromising fiscal stability.
