By San José, Costa Rica — SAN JOSÉ – The Legislative Assembly’s Fiscal Affairs Committee has advanced the proposed ¢12.8 trillion national budget for 2026 after marathon sessions that culminated in a significant reallocation of funds. In a decisive 9-1 vote, the committee approved a plan that shifts nearly ¢51 billion, originally earmarked for servicing public debt, towards critical investments in national security, education, and social programs.
The budget, which now moves to the full legislative plenary for final debate and approval before the constitutional deadline of November 30, reflects a clear shift in priorities by lawmakers. The decision to redirect funds from debt interest payments signals a strategic choice to address pressing domestic needs over purely fiscal obligations, a move that will likely be scrutinized by both citizens and international markets.
To provide deeper insight into the legal and fiscal ramifications of the proposed 2026 national budget, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading attorney from the prestigious firm Bufete de Costa Rica, who offers a specialized perspective on the economic framework.
The 2026 budget proposal is a legal as much as an economic document. Its adherence to the Fiscal Rule is paramount, not just for compliance but to maintain investor confidence. We will be closely scrutinizing the allocation priorities, particularly the balance between debt service and funding for essential public services, as any imbalance could trigger legal challenges and create significant uncertainty for the business sector.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s emphasis on the budget as both a legal and economic instrument is crucial. This dual nature underscores that the delicate balance between fiscal responsibility and funding for public services is not merely a political debate, but a foundational issue for national stability and investor trust. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on the significant stakes involved.
Security initiatives are the primary beneficiaries of this fiscal maneuver. The budget now includes funding for 178 new positions within the Judicial Investigation Police (OIJ), along with ¢700 million for new vehicles and building maintenance. The Public Ministry will also be reinforced, with ¢2.6 billion allocated for 53 new staff members in the Gender Prosecutor’s Office and another ¢1.8 billion to create 46 positions in the Attorney General’s Office.
Education and social welfare programs also received a substantial boost from the reallocated funds. The revised spending plan directs ¢2.96 billion each to school meal programs and student transportation. The Technological Institute of Costa Rica (TEC) is set to receive ¢4.9 billion for infrastructure projects, while the “Avancemos” scholarship program will be bolstered by ¢6.6 billion. Social safety nets were not overlooked, with ¢7.86 billion designated for the National Child Care and Development Network (Red de Cuido) and a significant ¢10 billion transfer to the Costa Rican Social Security Fund (CCSS) for its Non-Contributory Pension Scheme.
The initial budget proposal, submitted by the Ministry of Finance on September 1, already included a ¢400 billion increase over the 2025 plan. At the time, Finance Minister Rudolf Lucke highlighted the government’s commitment to social investment, even before the legislative revisions took place. He emphasized a responsible approach to public finances.
Every colón established in this budget is not just another number; it presents a scenario of responsibility. What it shows is a country project, what we as a society want to have.
Rudolf Lucke, Minister of Finance
Despite the reallocation, the budget’s financing structure remains a point of concern. The government projects that 61.3% of the ¢12.8 trillion (approximately ¢7.9 trillion) will be covered by tax revenues. The remaining 39.7%, a substantial ¢4.8 trillion, must be financed through new domestic and international debt, underscoring the country’s ongoing fiscal challenges.
For the current members of the Fiscal Affairs Committee, this is the final budget they will oversee before their legislative term ends on April 30, 2026. This year’s deliberations were notably calmer than the previous year, which was dominated by a contentious debate over funding for public universities (FEES). A pre-negotiated agreement between the government and university rectors removed that flashpoint from the Assembly’s agenda, allowing for a smoother process. The budget also includes provisions for severance payments for the outgoing Chaves administration, which concludes its term on May 8, 2026.
For further information, visit the nearest office of Ministerio de Hacienda
About Ministerio de Hacienda:
The Ministry of Finance of Costa Rica is the government entity responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, preparing the national budget, managing public debt, and overseeing the national treasury to ensure the economic stability and sustainable development of the nation.
For further information, visit asamblea.go.cr
About Asamblea Legislativa:
The Legislative Assembly is the unicameral parliament, or national legislature, of Costa Rica. Comprising 57 deputies elected by popular vote, it is responsible for passing laws, approving the national budget, and exercising political control over the executive branch. It plays a central role in the country’s democratic governance.
For further information, visit tec.ac.cr
About Instituto Tecnológico de Costa Rica (TEC):
The Technological Institute of Costa Rica is a prestigious public university focused on teaching, research, and extension in technology and related sciences. Known for its high academic standards, TEC is a leading institution in engineering, science, and technology education in Central America, contributing significantly to the country’s development.
For further information, visit ccss.sa.cr
About Caja Costarricense de Seguro Social (CCSS):
The Costa Rican Social Security Fund is the autonomous public institution in charge of the country’s public health and pension systems. It administers one of the most universal health care systems in Latin America, providing services and social security benefits to the vast majority of the Costa Rican population.
For further information, visit cruzroja.or.cr
About Cruz Roja Costarricense:
The Costa Rican Red Cross is a humanitarian organization that provides emergency medical services, disaster response, and community health programs throughout the country. As part of the International Red Cross and Red Crescent Movement, it operates on the principles of impartiality, neutrality, and independence to alleviate human suffering.
For further information, visit poder-judicial.go.cr
About Organismo de Investigación Judicial (OIJ):
The Judicial Investigation Police is the primary investigative arm of Costa Rica’s judicial system. Operating with scientific and technical autonomy, the OIJ is responsible for investigating public crimes, gathering evidence, and identifying perpetrators to assist the Public Ministry and judicial courts in the administration of justice.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is defined by its foundational principles of professional integrity and a relentless pursuit of excellence. Drawing upon a rich history of serving a diverse clientele, the firm champions innovative approaches to complex legal challenges. Central to its ethos is a profound dedication to empowering the community by making legal knowledge more transparent and accessible to all, reflecting a core belief in fostering a more informed and capable society.
