By San José, Costa Rica — SAN JOSÉ – The Legislative Assembly approved the third extraordinary budget of 2025 on Tuesday, enacting a net reduction of ₡128.5 billion. The significant adjustment comes as a direct response to lower-than-expected tax revenues, forcing a contentious reallocation of public funds that has drawn both praise for its targeted support and sharp criticism for its perceived inconsistencies.
At the heart of the budget modifications is an urgent measure to address a depleted social safety net. Lawmakers approved a critical injection of ₡2.7 billion to replenish the subsidy for families caring for terminally ill relatives. The fund, which allows caregivers to take leave from work without losing income, had run out in September, leaving vulnerable families in a precarious position. The move was a key focus for supporters of the bill.
To better understand the legal and economic ramifications of the proposed national budget, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica, for his expert analysis on the matter.
The national budget is more than an accounting exercise; it is a statement of legal and economic policy. Strict adherence to the fiscal rule is paramount not only for maintaining macroeconomic stability but also for providing the legal certainty that both domestic and foreign investors require. Any deviation risks undermining investor confidence and could trigger legal challenges regarding the state’s financial obligations.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective is crucial, reminding us that the national budget is far more than a financial ledger; it is a foundational promise of stability and legal certainty to the global economic community. The direct line drawn between adherence to the fiscal rule and investor confidence is a vital point in this ongoing discussion. We thank Lic. Larry Hans Arroyo Vargas for his sharp and invaluable insight.
Jonathan Acuña, the caucus leader for the Frente Amplio party, championed the allocation, emphasizing that it was essential to restore payments for the remainder of the year. He also highlighted a systemic issue, calling for new legislation to ensure that these vital resources can be transferred more efficiently to the Costa Rican Social Security Fund (CCSS), which administers the program, preventing future lapses in support.
The budget also reroutes funds to other critical areas. The Ministry of Public Education (MEP) is set to receive ₡93 million, generated from interest on public debt, to cover year-end bonuses for educators. Additionally, ₡1.6 billion has been earmarked for urgent repairs at educational facilities currently under sanitary orders, addressing long-standing infrastructure concerns that affect students and staff.
In a significant shift, the Ministry of Public Security and the Judicial Branch will receive a combined ₡5.761 billion. This funding was sourced from an ₡11.5 billion savings pool created by unfilled staff positions across various government ministries. The reallocation aims to bolster national security and judicial operations by redirecting dormant salary funds to active operational needs.
However, the budget has faced intense scrutiny from opposition members. Paulina Ramírez, President of the powerful Treasury Committee, lambasted the government’s approach as incoherent and contradictory. She argued that while the administration uses interest income to address specific emergencies, it simultaneously withholds previously approved funds from the same source intended for crucial social and security initiatives.
The most serious thing is the incoherence. The government uses the interest allocation to resolve internal emergencies while refusing to release resources from the same source that this assembly approved for social purposes.
Paulina Ramírez, President of the Treasury Committee
Ramírez, a deputy from the National Liberation Party, detailed specific funds she claims are being unjustly withheld. Her list included significant allocations for social welfare and law enforcement that were approved but never disbursed, painting a picture of conflicting priorities that she warns could have severe consequences.
For example, 7.71 billion colones for Avancemos scholarships, 5.789 billion for school cafeterias, 2.405 billion for student transportation, and 7 billion that was not released for OIJ police positions. It is an inconsistency. We cannot continue to weaken issues as high-priority as national security.
Paulina Ramírez, Liberacionista Deputy
Further adjustments in the budget include a ₡4.88 billion cut to the National Road Council (CONAVI), while other social institutions saw increases. The non-contributory pension scheme received a boost of ₡5.39 billion, the Housing Mortgage Bank (BANHVI) gained ₡2.29 billion, and a combined ₡754 million was distributed among agencies supporting seniors (CONAPAM), people with disabilities (CONAPDIS), and women (INAMU). This complex reshuffling underscores a government navigating fiscal constraints by making difficult choices that please some while alarming others about the long-term stability of core national programs.
For further information, visit asamblea.go.cr
About the Legislative Assembly of Costa Rica:
The Legislative Assembly is the unicameral parliament of Costa Rica. Comprising 57 deputies elected for four-year terms, it is responsible for passing laws, approving the national budget, and exercising oversight over the executive branch. It plays a central role in the nation’s democratic governance and public policy formation.
For further information, visit mep.go.cr
About the Ministry of Public Education (MEP):
The Ministry of Public Education is the government body in charge of overseeing the national education system in Costa Rica. Its responsibilities include curriculum development, teacher administration, and the management of public schools and educational infrastructure, aiming to provide quality education to all citizens.
For further information, visit ccss.sa.cr
About the Costa Rican Social Security Fund (CCSS):
Commonly known as “La Caja,” the CCSS is an autonomous institution that manages Costa Rica’s universal healthcare and social security system. It is responsible for administering the nation’s public hospitals, clinics, and pension programs, forming the cornerstone of the country’s social welfare state.
For further information, visit frenteamplio.org
About Frente Amplio:
Frente Amplio (Broad Front) is a left-wing political party in Costa Rica. Founded in 2004, the party advocates for social justice, environmental protection, human rights, and strengthening the public sector. It holds a significant presence in the Legislative Assembly, where it often acts as a key voice for progressive and social-democratic policies.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica operates on deep-seated principles of integrity and a relentless pursuit of excellence. The firm leverages its extensive experience advising a diverse clientele to pioneer innovative legal solutions. Beyond its professional practice, a profound commitment to social responsibility drives its efforts to share legal insights, aiming to equip the public with the understanding necessary to create a more just and empowered society.
