Silviase/jgov_v1.4_full_ann huggingface dataset:
## 3 Revenue Trends

The ratio of the general revenue resources fell substantially in FY2009, but rallied to an increase in FY2010. It remained almost at the same level in FY2012.

□ shows general revenue resources + bond for temporary substitution for local allocation tax.

Note: “National treasury disbursements” includes “special grants to measures for traffic safety” and “grants to cities, towns and villages where national institutions are located.”
Composition of Revenue from Prefectural Taxes (FY2012 settlement)

Composition of Revenue from Municipal Taxes (FY2012 settlement)

Note : In the case of the special wards of Tokyo, the Tokyo Metropolitan Government collects a portion of the municipal taxes. Municipal tax revenue figures include municipal taxes collected by the Tokyo Metropolitan Government.
Prefectural tax revenues dropped lately due to a decrease in prefectural inhabitant taxes revenues and a decline in enterprise tax revenues (corporate) which is caused by the introduction of a special tax on local corporations, etc., but increased in FY2012.

Trends in Prefectural Tax Revenues

Municipal tax revenues fell sharply in FY2009 mainly because of a decline in municipal inhabitant tax and have remained almost at the same level since then.

Trends in Municipal Tax Revenues

Note : Municipal tax revenue figures include municipal taxes collected by the Tokyo Metropolitan Government.
In order for local governments to provide public services in response to local needs on their own responsibility and at their own discretion, it is necessary to build a less imbalanced and stable local tax system. Comparing local tax revenue amounts, with the national average set at 100, Tokyo, the highest, was approximately 2.5 times the amount for Okinawa Prefecture, which was the lowest.

## I ndex of Per Capita Revenue in Local Tax Revenue (with national average as 100)

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 or discretionary 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, 2013.
## 5 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 their 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 the necessary tax revenue. Accordingly, the central government collects revenue resources that would essentially 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 a fixed percentage 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 the local allocation tax in FY2012 was ¥18,289.8 billion, down 2.5% 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 through the following mechanism.

Notes: 1. Standard financial requirements are figured out based on the rational and appropriate service standards for each local government. For this reason, the local share of the services, such as compulsory education, benefits for livelihood protection, and public works which are subject to national obligatory share, is mandatorily included. Beginning in FY2001, part of the standard financial requirements is being transferred to special local bonds (bond for temporary substitution for local allocation tax) as an exception to Article 5 of the Local Finance Law.

2. Normal local tax revenue does not include Non-Act-based Tax or “over-taxation” that sets tax rates above the standard tax rate stipulated in the Local Tax Act.

### 3. Function of the local allocation tax

The function of the local allocation tax is to adjust imbalances in revenue resources between local governments and to ensure their financial capacity to provide standard public services and basic infrastructure to residents across the country.

The adjustment of revenue resources through local allocation tax makes the ratios of general revenue resources to the total revenues between local governments practically flat regardless of the size of population.

Ratio of Total Revenue for Municipalities Composed of General Revenue Resources

Note : A “midsize city” refers to a city with a population of 100,000 or more excluding government-ordinance-designated cities, core cities, and special cities, and a “small city” refers to a city with a population of less than 100,000.
## What are expenses spent on?

## 1 Expenses Classified by Function

Classifying the expenses by function demonstrates that much of public money is appropriated for public welfare expenses, education expenses, and debt service. In prefectures, education expenses, public welfare expenses, and debt service have the highest shares in that order. In municipalities, public welfare expenses, general administration expenses, and civil engineering work expenses account for the largest amounts in that order.

## Composition of Expenditure Classified by Function (FY2012 settlement)

Public welfare expenses : Expenses for the construction and operation of welfare facilities for children, the elderly, the mentally and physically disabled, etc., and for the implementation of public assistance, etc.
## Expenditures in Regular Portion and Great East Japan Earthquake Portion (Expenses Classified by Function)

## Net total

## Prefectures

## Municipalities
While civil engineering work expenses and agriculture, forestry and fishery expenses fell, public welfare expenses significantly rose.

* Indices use FY2002 as base year of 100

## Trends in Breakdown of Public Welfare Expenses by Purpose
## Breakdown of Public Welfare Expenses by Purpose

### Net total ¥23,152.3 billion

Prefectures ¥7,302.4 billion

¥7,253.6 billion (31.3%)

¥1,451.9 billion (19.9%)

Municipalities ¥18,457.3 billion

¥5,725.2 billion (24.7%)

¥5,567.3 billion (24.0%)

¥6,546.2 billion (35.5%)

¥3,905.1 billion (16.9%)

¥701.1 billion (3.0%)

¥2,996.5 billion (41.0%)

¥2,237.7 billion (30.6%)

¥270.8 billion (3.7%)

¥345.5 billion (4.7%)

¥3,376.9 billion (18.3%)

¥4,323.6 billion (23.4%)

¥3,685.7 billion (20.0%)

¥524.9 billion (2.8%)

## Breakdown of Educational Expenses by Purpose

### Net total ¥16,147.9 billion

¥4,761.4 billion (29.5%)

### Prefectures ¥10,862.7 billion

¥3,451.1 billion (31.8%)

### Municipalities ¥5,364.6 billion

¥2,816.3 billion (17.4%)

¥2,824.4 billion (17.5%)

¥1,318.1 billion (24.6%)

¥2,166.2 billion (13.4%)

¥1,224.1 billion (7.6%)

¥1,110.4 billion (6.9%)

¥1,245.1 billion (7.7%)

¥2,028.0 billion (18.7%)

¥2,154.9 billion (19.8%)

#### ¥2,005.4 billion (18.5%)

¥120.5 billion (1.1%)

¥154.1 billion (1.4%)

¥948.7 billion (8.7%)

¥792.7 billion (14.8%)

¥704.1 billion (13.1%)

¥161.6 billion (3.0%)

¥1,115.4 billion (20.8%)

¥969.5 billion (18.1%)

¥303.2 billion (5.6%)

## Breakdown of Civil Engineering Work Expenses by Purpose

### Net total ¥11,242.3 billion

¥4,203.5 billion (37.4%)

¥3,727.8 billion (33.2%)

#### ¥1,216.8 billion (10.8%)

¥991.4 billion (8.8%)

¥378.1 billion (3.4%)

¥724.7 billion (6.4%)

### Prefectures ¥5,304.7 billion

¥1,041.6 billion (19.6%)

¥2,153.7 billion (40.6%)

¥1,074.8 billion (20.3%)

¥446.0 billion (8.4%)

¥264.7 billion (5.0%)

¥323.9 billion (6.1%)

### Municipalities ¥6,136.7 billion

¥3,229.7 billion (52.6%)

¥1,613.7 billion (26.3%)

¥156.3 billion (2.5%)

¥577.4 billion (9.4%)

¥138.8 billion (2.3%)

¥420.8 billion (6.9%)
## What are expenses used for?

## 2 Expenses Classified by Type

Expenses are also classified, according to their economic nature, into “mandatory expenses” (consisting of personnel expenses, public assistance expenses, and debt service), the payment of which is mandatory and the amount of which is difficult to reduce at the discretion of individual local governments, “investment expenses” including ordinary construction work expenses, and “other expenses,” such as goods expenses, subsidizing expenses, and reserves).

## Composition of Expenditures Classified by Type (FY2012 settlement)
## Expenditures in Regular Portion and Great East Japan Earthquake Portion (Expenses by Type)

## Net total

## Prefectures

## Municipalities
While investment expenses and personnel expenses fell, public assistance expenses, subsidizing expenses and transfers to other accounts rose.

$ ^{*} $ Indices use FY2002 as base year of 100

Trends in Breakdown of Public Assistance Expenses by Purpose
## Trends in Breakdown of Subsidizing Expenses by Purpose

## Trends in Breakdown of Transfers to Other Accounts
## Flexibility of the Financial Structure

## How financially capable are local governments to respond to local demands?

It is necessary that local governments have financial resources for not only the mandatory expenses but also projects to address properly challenges caused by changes in the social economy and administrative needs so that they can meet adequately the needs of their residents. The extent which the resources for such purposes are secured is called the “flexibility of the financial structure.”

## 1 Ordinary Balance Ratio

The FY2012 ordinary balance ratio rose 0.1 percentage points year-on-year, to 92.7%, staying above 90% for the ninth consecutive year.

Ordinary balance ratio

General revenue resources allotted to personnel expenses, public assistance expenses, debt service, etc.

Ordinary general revenue resources, etc. (local tax + regular local allocation tax, etc.) + special exception portion of loans for covering decreases in local tax revenues + bonds for temporary substitution of local allocation tax

The ordinary balance ratio is the proportion of general revenue resources allotted to ordinary expenses such as personnel expenses, public assistance expenses, debt service and other annually disbursed expenses with regularity to a total amount of ordinary general revenue resources primarily consisting of local tax and regular local allocation tax, special exception portion of loans for covering decreases in local tax revenues and bonds for temporary substitution of local allocation tax.

Shifts in the ordinary balance ratio

* Special wards and special districts, etc., are not included in net total and municipalities.

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

Close attention should be paid to the trend of the debt service, which is the expense required to repay the principal and interest of the debts of local governments and has an especially negative impact on financial flexibility. The real debt service ratio and the debt service payment ratio are indices that determine the extent of the burden of the debt service.

## Trends in the Real Debt Service Ratio

* For more detailed information please refer to page 33.

## 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 debt service (amount of repayment of the principal and interest on local bonds) in 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 debt service restricts the freedom of use of general revenue resources.
## Outstanding Local Government Borrowing

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

## 1 Trends in Outstanding Local Government Borrowing

Outstanding local government borrowing amounted to approximately ¥145 trillion at the end of FY2012, and has been increasing in recent years with the growing issue of bonds for the extraordinary financial measures. The figure is 1.45 times larger than the total revenue and about 2.62 times larger than the total general revenue resources.

Note : Outstanding local government borrowing excludes special fund public investment bonds.

## 2 Trends in Outstanding Borrowing Borne by the Ordinary Accounts

Outstanding local public finance borrowing—which includes borrowing in the special account for local allocation tax and transfer tax for addressing revenue resource shortages, as well as the redemption of public enterprise bonds borne by the ordinary accounts, remains at a high level, amounting to approximately ¥201 trillion at the end of FY2012.

Outstanding public enterprise bonds (included in ordinary accounts) Outstanding borrowing from special account for local allocation tax and transfer tax grants

Outstanding local government bonds

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

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

## What is the status of local public enterprises?

## 1 Ratio of Local Public Enterprises

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

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.
## 2 Number of Businesses Operated by Local Public Enterprises

There are 8,724 businesses that are operated by local public enterprises. By type of business, sewage accounts for the largest ratio, followed, in order, by water supply, hospitals, care services, and residential development.

## 3 Scale of Financial Settlement

The scale of total financial settlement is ¥17,024.6 billion. By type of business, sewage accounts for the largest ratio, followed, in order, by hospitals, total water supply, transportation, and residential development.
## 4 Financial Status

Local public enterprises had a surplus of ¥523.1 billion. By type of business, total water supply, electricity, and sewages showed a surplus.
## 1 Settlement of Disaster-Struck Organizations

### 1. Specified Disaster-Struck Prefectures

In FY2012, the total revenues of the nine specified disaster-struck prefectures amounted to ¥11,407.3 billion, decreasing by ¥695.1 billion year on year, or 5.7% (2.3% decrease on national basis). Total expenditures for the entities amounted to ¥10,775.6 billion, falling by ¥868.4 billion year on year, or 7.5% (2.9% decrease on a national basis).

* Specified disaster-struck prefectures: Prefectures stipulated in Article 2, Paragraph 2 of the act on special public finance support and assistance to deal with the Great East Japan Earthquake (Act No. 40 of 2011). These prefectures are Aomori, Iwate, Miyagi, Fukushima, Ibaraki, Tochigi, Chiba, Niigata, and Nagano prefectures.

Revenues

## Expenditures Classified by Purpose

## Expenditures Classified by Type
### 2. Specified Disaster-Struck Municipalities

In FY2012, the total revenues of the 227 municipalities designated as specified disaster-struck municipalities amounted to ¥8,514.1 billion, increasing by ¥1,271.1 billion year on year, or 17.5% (2.5% increase on national basis). Total expenditures for the entities amounted to ¥8,032.1 billion, rising by ¥1,203.9 billion year on year, or 17.6% (2.4% increase on a national basis).

: Municipalities designated in Appended Table 1 and those designated in Appended Tables 2 and 3 that are other than specified disaster-struck local public bodies of the Japanese government ordinance (No. 127, 2011) concerning Article 2, Paragraphs 2 and 3 of the act on special public finance support and assistance to deal with the Great East Japan Earthquake. (A total of 227 organizations in 11 prefectures, including, 33 organizations within Iwate Prefecture, 35 organizations within Miyagi prefecture, and 59 organizations within Fukushima prefecture.)

Revenues

Expenditures Classified by Purpose

Expenditures Classified by Type
# Impact of Great East Japan Earthquake

## 2 Financial Status of Businesses of Local Public Enterprises of Disaster-Struck Organizations

Total revenues and expenditures of local public enterprises of disaster-struck organizations amounted to a surplus of ¥76.3 billion, increasing by ¥51.6 billion year on year, or 208.4%. There were 848 businesses with surpluses, or 90.5% of all businesses, while 89 businesses had deficits, or 9.5%.

## Financial Status of Businesses of Local Public Enterprises of Disaster-Struck Organizations

## Settlements by Businesses of Local Public Enterprises of Disaster-Struck Organizations
## Promotion of the Soundness of Local Public Finance

## 1 Overview of the Act on Assurance of Sound Financial Status of Local Governments

A number of drawbacks were pointed out with the conventional system of financial reconstruction of local governments, including the lack of a legal obligation to disclose comprehensible financial information and of rules for early warning. In response, the Act on Assurance of Sound Financial Status of Local Governments was enacted and has been in force since April 2009. The act establishes new indexes and requires local governments to disclose them thoroughly, aiming to quickly achieve financial soundness or rebuild.

## Outline of the Act on Assurance of Sound Financial Status of Local Governments

## Sound stage

## Establishment of indexes and thorough disclosure

Flow indexes: Real deficit ratio, consolidated real deficit ratio, real debt service ratio

Stock indexes: Future burden ratio = indexes by real liabilities, including public enterprises, third-sector enterprises, etc.

Subject to auditor inspection, reported to the council and publicly announced

## Early financial soundness restoring stage

Restoring financial soundness through their own efforts

Formulation of financial plans (approval by the council), mandatory requests for external auditing

● Report on progress of implementation to the council and public announcement every fiscal year

If the early achievement of financial soundness is deemed to be significantly difficult, the Minister for Internal Affairs and Communications or the prefectural governor makes necessary recommendations

## Financial soundness of public enterprise

## Financial rebuilding stage

## Solid rebuilding through involvement of the central government, etc

Formulation of financial rebuilding plans (approval by the council), mandatory requests for external auditing

• Agreement on the financial rebuilding plan can be sought through consultation with the Minister for Internal Affairs and Communications

If financial management is deemed not to conform with the plan, the Minister for Internal Affairs and Communications makes necessary recommendations, such as budget changes

Sound finance

Early financial soundness restoring standard

Real deficit ratio

Prefectures : 3.75%

Municipalities : 11.25% ~ 15%

## Consolidated real deficit ratio

Prefectures : 8.75%

Municipalities : 16.25% ~ 20%

Real debt service ratio

25%

Future burden ratio

## Prefectures, Government-ordinance-designated city: 400% Municipalities: 350%

Finance shortfall ratio (for each public enterprise)

20%

Management soundness standard

## Financial rebuilding standard

Financial deterioration

Prefectures : 5%

Municipalities : 20%

Prefectures : 15%

Municipalities : 30%

* The real deficit ratio and consolidated real deficit ratio standards for Tokyo were set separately from the general municipalities ratios.

35%

Public announcement of indexes began with FY2007 settlement of accounts. Obligatory formulation of financial soundness plan was applied as of FY2008 settlement of accounts.
## Targets of the Ratio for Determining Financial Soundness

## 2 Status of the Ratios for Determining Financial Soundness

## Real Deficit Ratio

The following graph shows the trend in the number of local governments with a real deficit.

Based on FY2012 account settlements, there were no local governments with a real deficit (i.e., with a real deficit ratio that exceeds 0%) among municipalities.

The real deficit ratio is an index of the deficit level of the general account, etc. of local governments offering welfare, education, community-building, and other services, and represents the extent to which financial administration has worsened.
## Consolidated Real Deficit Ratio

The following graph shows the trend in the number of local governments with a consolidated real deficit.

Based on FY2012 account settlements, there were seven local governments with a consolidated real deficit (i.e., with a consolidated real deficit ratio that exceeds 0%) among municipalities. Of those local governments, none had a consolidated real deficit ratio that equals or exceeds the early financial soundness restoring standard.

The consolidated real deficit ratio is an index of the deficit level for all local governments by taking the sum of the deficits and surpluses of all accounts, and represents the extent to which financial administration has worsened for local governments as a whole.

Local governments with a consolidated real deficit

Of this number, those equaling or exceeding the early financial soundness standard

Of this number, those equaling or exceeding the financial rebuilding standard

## Real Debt Service Ratio

The following graph shows the trend in the number of local governments with a real debt service ratio equal to or exceeding 18%.

Based on FY2012 account settlements, there was one local government with a real debt service ratio equal to or exceeding the financial rebuilding standard.

Real debt service ratio (3-year average)

(Redemption of principal and interest of local bonds + quasi-redemption of principal and interest) – (special revenue resources + amount included in standard financial requirements pertaining to redemption and quasi-redemption of principal and interest)

Standard financial scale – (amount included in standard financial requirements pertaining to redemption and quasi-redemption of principal and payments)

The real debt service ratio is an index of the size of the redemption amount of debts (local bonds) and similar expenditure, and represents the cash-flow level.

* Local governments with a real debt service ratio equal to or exceeding 18% require the approval of the Minister of Internal Affairs and Communications, etc., to issue local government bonds.

(No. of local governments)

Local governments with real debt service ratio equal to or exceeding 18% Of this number, those equaling or exceeding the early financial soundness standard

Of this number, those equaling or exceeding the financial rebuilding standard