Silviase/jgov_v1.4_full_ann huggingface dataset:
# The Status of Local Public Finance

## FY2009 Settlement Overview

Revenues and expenditures increased due to national economic policy, etc.

## Revenues

##### ¥98,365.7 billion (up ¥6,152.2 billion, 6.7%, year on year)

Although local tax revenues (mainly the two corporate taxes) decreased, revenues from local allocation tax and municipal bonds (mainly extraordinary financial countermeasures bonds), etc., increased. In addition, total revenues rose for the second consecutive year with an increase of ¥6,152.2 billion, due to an increase of national treasury disbursements resulting from national government economic policy measures.

## Expenditures

##### ¥96,106.4 billion (up ¥6,415.0 billion, 7.2%, year on year)

Although personnel expenditures and public debt payments decreased, total expenditures rose for the second consecutive year with an increase of ¥6,415.0 billion, due to an increase in investment expenses and other expenses (mainly subsidies, etc.) resulting from national government economic policy measures, etc.

## 3 Flexibility of the Financial Structure

The ordinary balance ratio reached its highest level since calculation was started, and has maintained a high level.

## 4 Trends in Outstanding Borrowing that Should be Shouldered by Ordinary Accounts

## Amounts remained at a high level

Notes:

1. Outstanding public enterprises bonds (borne by the ordinary account) are estimates based on settlement account statistics.

2. Outstanding local government bonds exclude special fund public investment bonds.

3. Figures for each item that are less than the given unit are rounded off. Therefore, they do not necessarily add up exactly to the total.
## Scale of Account Settlement

Revenues and expenditures both showed year-on-year increases in settlement amount for the second consecutive year. The main factor for the increase in revenues was an increase in revenue from national treasury disbursements, local allocation tax, and municipal bonds (mainly extraordinary financial countermeasures bonds), etc., resulting from national government economic policy measures, etc. The main factor for the increase in expenditures was an increase in investment expenses, subsidies, etc., and reserves, etc., for each type of grant fund for special purposes, resulting from national government economic policy measures, etc.

## Revenue and Expenditure Settlement

The real single fiscal-year balance showed a surplus for the second consecutive year, while the single-year balance showed a surplus for the first time in three years.

Category	Settlement period	No. of organizations with a deficit
FY2009	FY2008	FY2009	FY2008
Real single FY balance	¥238.2 billion	¥182.8 billion	440 (1,004)	611 (1,315)
Single FY balance	¥172.0 billion	$ \triangle $ ¥78.4 billion	579 (1,153)	843 (1,539)
Real balance	¥1,444.7 billion	¥1,279.7 billion	13 (13)	19 (19)

Notes:

1. Real single FY balance refers to the amount calculated by adding reserves and advanced redemption of local loans for the public finance adjustment fund to the single FY balance and subtracting public finance adjustment fund reversals.
General revenue resources constituted approximately 54% of total revenues, a year-on-year decrease resulting from a drop in revenue from local taxes and special local grants.

## Nationwide

## FY1997

Local transfer tax 1.1% (¥1.1 trillion)

Local taxes 36.2% (¥36.2 trillion)

General revenue resources 54.4% (¥54.4 trillion)

Local allocation tax 17.1% (¥17.1 trillion)

Local transfer tax 0.7% (¥0.6 trillion)

Local taxes 34.4% (¥33.4 trillion)

## FY2002

Local bonds 14.1%

(₹14.1 trillion)

General revenue resources 56.0% ( $ ¥54.5 $ trillion)

Local transfer tax 2.0% (¥1.8 trillion)

Local taxes 37.4% (¥34.8 trillion)

## FY2005

National treasury disbursements 14.4% (¥14.4 trillion)

General revenue resources 59.3% ( $ ¥55.1 $ trillion)

Local transfer tax 4.1% (¥3.7 trillion)

Local taxes 39.9% (¥36.5 trillion)

### Net Total ¥99.9 trillion

Local allocation tax 20.1% (¥19.5 trillion)

## FY2006

#### Special local grants 0.9% (¥0.9 trillion)

Local bonds 13.7%

(¥13.3 trillion)

National treasury disbursements 13.6% (¥13.2 trillion)

#### General revenue resources 62.3% (¥57.0 trillion)

### Net Total ¥97.2 trillion

Local transfer tax 0.8% (¥0.7 trillion)

Local taxes 44.2% (¥40.3 trillion)

## FY2007

Local allocation tax 18.2% (¥17.0 trillion)

#### Special local grants 1.6% (¥1.5 trillion)

General revenue resources 62.0% (¥56.5 trillion)

National treasury disbursements 12.8% (¥11.9 trillion)

Local bonds 11.2% (¥10.4 trillion)

### Net Total ¥92.9 trillion

#### Special local grants 0.9% (¥0.8 trillion)

Local allocation tax 17.5% (¥16.0 trillion)

National treasury disbursements 11.5% (¥10.5 trillion)

Local bonds 10.5% (¥9.6 trillion)

### Net Total ¥91.5 trillion

#### Special local grants 0.3% (¥0.3 trillion)

Local allocation tax 16.7% (¥15.2 trillion)

National treasury disbursements 11.3% (¥10.3 trillion)

Other revenue resources 16.7% (¥16.3 trillion)

#### Local transfer tax 0.7% (¥0.7 trillion)

Local transfer tax 1.3% (¥1.3 trillion)

Local taxes 35.8% (¥35.2 trillion)

Local bonds 10.5% (¥9.6 trillion)

Local taxes 42.9% (¥39.6 trillion)

### Net Total ¥91.2 trillion

General revenue resources 60.9% (¥56.2 trillion)

## FY2008

#### Special local grants 0.6% (¥0.5 trillion)

Local allocation tax 16.7% (¥15.4 trillion)

National treasury disbursements 12.7% (¥11.7 trillion)

General revenue resources 53.6% (¥52.8 trillion)

Net Total ¥92.2 trillion

- Special local grants 0.5% (¥0.5 trillion)

Local bonds 10.8% (¥9.9 trillion)

Local allocation tax 16.1% ( $ ¥15.8 $ trillion)

National treasury disbursements

Other revenue resources 15.7% (¥14.4 trillion)

17.1%

(¥16.8 trillion)

Other revenue resources 16.2% (¥14.8 trillion)

Other revenue resources 17.1% (¥17.1 trillion)

Net Total ¥98.4 trillion

Other revenue resources 16.7% (¥15.5 trillion)

Local bonds 12.6%

(¥12.4 trillion)

## FY2009

Other revenue resources 15.6% (¥14.4 trillion)

Other revenue resources 16.6% (¥16.4 trillion)

Note: “National treasury disbursements” includes “special grants to measures for traffic safety” and “grants to cities, towns and villages where national institutions are located.”
Local taxes consist of prefectural taxes and municipal taxes. (In the case of the special wards of Tokyo, the Tokyo Metropolitan Government collects a portion of municipal taxes.)

Composition of Revenue from Prefectural Taxes (FY2009 settlement)

Composition of Revenue from Municipal Taxes (FY2009 settlement)

Note: Municipal tax revenue figures include municipal taxes collected by the Tokyo Metropolitan Government.
Prefectural tax revenues dropped from the previous fiscal year due to decreases in the two corporate taxes (corporate inhabitant tax, corporate business tax) resulting from a sluggish economy. A decrease in revenues from corporate municipal taxes and individual municipal taxes also led to a year-on-year decrease in municipal tax revenues.

Trends in Prefectural Tax Revenues

Note: Figures in parentheses indicate the component ratios of the business tax and prefectural inhabitant tax.

## Trends in Municipal Tax Revenues

Notes:

1. Figures in parentheses indicate the component ratio of the municipal inhabitant tax.

2. Municipal tax revenue figures include municipal taxes collected by the Tokyo Metropolitan Government.
Index of Per Capita Revenue in Local Tax Revenue (with national average as 100)

In order for local governments to provide administrative services in response to local needs on their own responsibility and at their own discretion, it is necessary to build a local tax system in which the uneven distribution of tax sources is minimized and the stability of tax revenue is guaranteed.

Comparing local tax revenue amounts, with the national average set at 100, Tokyo, the highest, was approximately 2.7 times the amount for Okinawa Prefecture, which was the lowest.

Notes:

1. "Max/min" indicates the value obtained by dividing the maximum value of per-capita tax revenue for each prefecture by the minimum value.

2. Local tax revenue amounts include local corporation special transfer tax, but do not include overassessment, discretionary tax earmarked for general use, or discretionary tax earmarked for special use. Further, the value is the amount after settlement of local consumption tax.

3. Individual inhabitant tax revenue is the total of the prefectural individual inhabitant tax (on a per-capita basis and on an income basis) and the municipal individual inhabitant tax (on a per-capita basis and on an income basis), and excludes overassessment.

4. Revenue from the two corporate taxes is the total of the corporate prefectural inhabitant tax, the corporate municipal inhabitant tax, and the corporate business tax, and excludes overassessment.

5. Fixed asset tax revenues include prefectural amounts, and exclude overassessment.

6. Calculations were made in accordance with the basic resident register population as of March 31, 2010.
## Local Allocation Tax

From the perspective of local autonomy, it would be the ideal for each local government to ensure the revenue sources necessary for administrative activities through local tax revenue collected from their residents. However, there are regional imbalances in tax sources, and many local governments are unable to acquire necessary tax revenue. Accordingly, the national government collects financial resources that would normally be attributable to local tax revenue and reallocates them as local allocation tax to local governments that have weaker financial capabilities.

## 1 Determining the total amount of local allocation tax

The total amount of the local allocation tax is determined in accordance with estimates of standard revenue and expenditures in local public finance as a whole, based on fixed ratios for national taxes (32% for income tax and liquor tax, 34% for corporate tax, 29.5% for consumption tax, and 25% for tobacco tax).

The total amount of local allocation tax in FY2009 was ¥15,820.2 billion, up 2.7% year on year.

## 2 How regular local allocation taxes are calculated for each local government

The regular local allocation tax for each local government is calculated using the following mechanism.

Notes:
## 3 Function of the local allocation tax

The function of the local allocation tax is to adjust imbalances in financial resources between local governments in order to guarantee that local governments have the financial resources that enable them to provide standard administrative services and basic social capital to their residents in each region.

Adjustment of financial resources through local allocation tax has prevented the size of population, etc., from creating significant differences in the ratio of total revenue composed of general financial resources.

Notes: A “midsize city” refers to a city with a population of 100,000 or more excluding government ordinance-designed cities, core cities, and special cities, and a “small city” refers to a city with a population of less than 100,000, excluding the aforementioned exceptions.
## Expenditures

## What are taxes spent on?

## Expenses by Function

When expenses are classified by function, we see that many financial resources are utilized for public welfare expenses, education expenses, and civil engineering work expenses. In prefectures, such resources are mainly utilized for education expenses, public welfare expenses, and civil engineering work expenses, in that order. In municipalities, they are primarily utilized for public welfare expenses, general administrative expenses, and civil engineering work expenses, in that order.

Public welfare expenses: Expenses for the construction and operation of welfare facilities for children, the elderly, the mentally and Expenses physically disabled, etc., and for the implementation of public assistance, etc.

Education expenses: Expenses for school education, social education, etc.

Civil engineering work expenses: Expenses for the construction and maintenance of public facilities, such as roads, rivers, housing, and parks.

Public debt payment: Expenses for the payment of principal, interest, etc., on debts.

Composition of Expenditure by Function (FY2009 settlement)
## Trends in the Breakdown of Expenditures by Function (ordinary account net total)

In recent years, welfare expenses, public debt payments, etc., have increased, while there has been a decline in such items as agriculture, forestry, and fishery expenses and civil engineering work expenses. Unit: Ratio with FY1997 set at 100.

0

50

100

150

200
## What are expenses used for?

## Expenses by Type

Classified by type, expenses can be divided into "mandatory expenses" (personnel expenses, public assistance expenses, and public debt payments), the payment of which is mandatory and difficult to reduce at the discretion of individual local governments, "investment expenses," including ordinary construction expenses, etc., and "other expenses."

Composition of Expenditures by Type (FY2009 settlement)

### Net total ¥96,106.4 billion

Investment expenses ¥14,518.5 billion (15.1%)

●Ordinary construction expenses ¥14,380.9 billion (15.0%)

Unsubsidized project expenses ¥7,200.3 billion (7.5%)

Subsidized project expenses ¥5,899.4 billion (6.1%)

### Prefectural total ¥50,245.3 billion

Investment expenses ¥7,766.1 billion (15.5%)

●Ordinary construction expenses ¥7,689.0 billion (15.3%)

Unsubsidized project expenses ¥3,175.6 billion (6.3%)

Subsidized project expenses ¥3,354.9 billion (6.7%)

### Municipalities total ¥52,018.4 billion

Investment expenses ¥7,341.1 billion (14.1%)

●Ordinary construction expenses ¥7,266.3 billion (14.0%)

Unsubsidized project expenses ¥4,256.6 billion (8.2%)

Subsidized project expenses ¥2,720.8 billion (5.2%)

#### Mandatory expenses ¥45,915.2 billion (47.8%)

Personnel expenses ¥23,975.6 billion (24.9%)

Public assistance expenses ¥9,086.3 billion (9.5%)

Public debt payments ¥12,853.2 billion (13.4%)

#### Mandatory expenses ¥21,783.1 billion (43.4%)

Personnel expenses ¥14,286.2 billion (28.4%)

Public assistance expenses ¥914.3 billion (1.8%)

Public debt payments ¥6,582.7 billion (13.1%)

#### Mandatory expenses ¥24,202.6 billion (46.5%)

Personnel expenses ¥9,689.5 billion (18.6%)

¥8,172.0 billion (15.7%)

Public debt payments

¥6,341.1 billion (12.2%)
Trends in Personnel Expenses

Breakdown of Personnel Expenses by Item

Prefectures

¥14,286.2 billion
## Trends in the Breakdown of Expenditures by Type (ordinary account net total)

In recent years, mandatory expenses such as public assistance expenses, public debt payments, etc., have increased, while there has been a decline in such items as ordinary construction expenses.

Unit: Ratio with FY1997 set at 100.

0

50

100

150

200

300
## Flexibility of the Financial Structure

## How can local financial administration respond to the demands of local governments?

In addition to financial resources allocated for mandatory expenses that require payment each year, local governments must also secure financial resources for measures to respond properly to changes in the social economy and administrative needs, in order to accurately meet the needs of residents. The extent to which these financial resources have been secured is called the “flexibility of the financial structure.”

## Ordinary Balance Ratio

The ordinary balance ratio (the weighted average excluding special wards and partial administrative associations, etc.) showed a 1.0 percentage point year-on-year increase to 93.8%, reaching its highest level since calculation was started, and has maintained a high level.

## Shifts in the ordinary balance ratio

| FY2000 | FY2001 | FY2002 | FY2003 | FY2004 | FY2005 | FY2006 | FY2007 | FY2008 | FY2009 (Fiscal year)
Prefectural | 89.3 | 90.5 | 93.5 | 90.8 | 92.5 | 92.6 | 92.6 | 94.7 | 93.9 | 95.9
Net total | 85.0 | 87.4 | 90.0 | 89.0 | 91.0 | 91.0 | 91.0 | 92.0 | 91.8 | 92.5
Municipal | 83.6 | 84.6 | 87.4 | 87.4 | 90.5 | 90.2 | 90.3 | 92.0 | 91.8 | 91.8

Breakdown of the ordinary balance ratio (Net total)
## Real Debt Service Ratio and Debt Service Payment Ratio

Because public debt payments (which are payments of the principal and the interest on the debts of local governments) are particularly lacking in flexibility, it is necessary to give constant scrutiny to trends in such payments. The real debt service ratio and debt service payment ratio are indices used to determine the extent of the public debt payment burden.

## State of the Real Debt Service Ratio

For information on the state of the real debt service ratio, please refer to the “State of the Ratio for Determining Soundness and Ratio of Fund Shortages” (page 29).

Trends in the Debt Service Payment Ratio

* Debt service payment ratio: The debt service payment ratio indicates the ratio of general revenue resources allocated for public debt service (general financial resources allocated for public service, including the principal and interest repayments on local bonds) to the total amount of general revenue resources. This index is used to determine the flexibility of the financial structure by assessing the degree to which public debt payments restrict the freedom of use of general financial resources.
## Outstanding Local Government Borrowing

## What is the status of debt in local public finance?

## Trends in Outstanding Local Government Borrowing

Outstanding local government borrowing, the debts of local governments, amounted to approximately ¥139 trillion at the end of FY2009. This figure has been increasing in recent years due to factors such as the need to supplement tax revenue as a result of tax cuts and the issue of extraordinary financial measures bonds. The figure is 1.42 times larger than total revenue and about 2.64 times larger than the total of general financial resources, such as local taxes and local allocation tax.

Notes:

1. Outstanding local government borrowing excludes special fund public investment bonds.

2. Figures for “economic stimulus measures” are estimates.
## 2 Outstanding Local Finance Borrowing

Outstanding local public finance borrowing—which includes borrowing in the special account for local allocation tax and transfer tax grants, which are used to address local financial resource shortages, as well as the redemption of public enterprise bonds borne by the ordinary account—remains at a high level, amounting to approximately ¥198 trillion at the end of FY2009.

Trends in Outstanding Borrowing that Should be Included in the Ordinary Account and the Ratio of Outstanding Borrowing to Gross Domestic Product

Notes:

1. Outstanding local government borrowing excludes special fund public investment bonds.

2. Outstanding public enterprise bonds (included in ordinary accounts) are estimates based on settlement account statistics.
## Local Public Enterprises

## What is the status of local public enterprises?

## Ratio of Local Public Enterprises

Local public enterprises play a major role in improving the standard of living of residents.

Current water-supply population

out of 125.57 million

124.82 million

(99.4%)

Sewage disposal population

out of 108.90 million

99.45 million

(91.3%)

No. of passengers per year

out of 22,724 million

3,002 million

(13.2%)

No. of passengers per year

out of 4,476 million

956 million

(21.4%)

No. of hospital beds

out of 1,601,000

216,000

(13.5%)

Notes:

1. The graph shows the ratio of local public enterprises when the total number of business entities nationwide is set at 100.

2. Figures for the total number of enterprises nationwide have been compiled from statistical materials of related organizations. Figures for local public enterprises have been compiled from figures for the total number of enterprises and settlements for the same fiscal year.
## Number of Businesses Operated by Local Public Enterprises

There are 8,903 businesses that are operated by local public enterprises. By type of business, sewage accounts for the largest ratio, followed, in order, by total water supply, hospitals, care services, and housing development projects.

## Scale of Financial Settlement

The scale of total financial settlement is ¥18,459.4 billion. By type of business, sewage accounts for the largest ratio, followed, in order, by hospitals, total water supply, transportation, and residential development.
## Management Status

Local public enterprises had a surplus of ¥298.6 billion. By type of business, while total water supply, electricity, and sewage showed a surplus, hospitals continue to register a deficit.

Trends in the Management Status of Local Public Enterprises

Note: “ $ \triangle $ ” denotes negative figures.
Targets of the Ratio for Determining Soundness
## I mage of Early Financial Soundness, Financial Rebuilding, and Soundness of Public Enterprise Management

Note 1: Figures outside parentheses are the standards for municipalities. Figures inside parentheses are the standards for prefectures. The standards of the Tokyo Municipal Government regarding the real deficit ratio and the consolidated real deficit ratio are specified separately.

Note 3: Under the previous Reconstruction Law, an organization under reconstruction was required to ensure the equilibrium of the real balance.

Note 2: Transitional standards have been established for the financial recovery standards for the consolidated real deficit ratio (H21: 40% (25%), H22: 40% (25%), H23: 35% (20%)). Transitional measures have been established for the standards for the Tokyo Municipal Government as well.

## Status of the Ratio for Determining Soundness and the Financial Shortfall Ratio

## Real Deficit Ratio

The following table shows the status of the real deficit ratio based on FY2009 account settlements.

Thirteen organizations fall under the category of organizations with a real deficit (i.e., with a real deficit ratio that exceeds 0%). None of these organizations have a real deficit ratio that equals or exceeds the early financial soundness standard.

State of the Real Deficit Ratio
## 2 Consolidated Real Deficit Ratio

The following table shows the status of the consolidated real deficit ratio based on FY2009 account settlements. Thirty-one organizations fall under the category of organizations with a consolidated real deficit (i.e., with a consolidated real deficit ratio that exceeds 0%). None of these organizations have a consolidated real deficit ratio that equals or exceeds the early financial soundness standard.

Status of the Consolidated Real Deficit Ratio

## 3 Real Debt Service Ratio

The following table shows the status of the real debt service ratio based on FY2009 account settlements. There are 12 organizations whose real debt service ratio equals or exceeds the early financial soundness standard. One of these organizations has a real debt service ratio that equals or exceeds the financial rebuilding standard.

Status of the Real Debt Service Ratio
## 4 Future Burden Ratio

The following table shows the status of the future burden ratio based on FY2009 account settlements.

There are three organizations whose future burden ratio equals or exceeds the early financial soundness standards.

Status of the Future Burden Ratio

## 5 Financial Shortfall Ratio

The following table shows the status of the financial shortfall ratio based on FY2009 account settlements. The accounts of 162 public enterprises fall under the category of accounts with a financial shortfall (i.e., with a financial shortfall ratio that exceeds 0%). Forty-nine of these accounts have a financial shortfall ratio that equals or exceeds the financial soundness standard.

Status of the Financial Shortfall Ratio (Number of Accounts by Type of Organization)