Silviase/jgov_v1.4_full_ann huggingface dataset:
## How large is local public finance?

The ratio of expenditure by local governments in gross domestic product (nominal) is 11.0%, about 2.7 times that of the central government.

Gross Domestic Product (Expenditure, nominal) and Local Public Finance (FY2015)
# The Role of Local Public Finance

## How large is local government expenditure in total public expenditure?

Looking at the breakdown of public expenditure classified by final expenditure entity, local government expenditure accounts for 42.8% of Government final consumption expenditure, and 49.4% of Public gross capital formation. As a final expenditure entity, local governments above the central government and play a major role for the national economy.

## Breakdown of public expenditures

Trends in public expenditures
The real balance showed a surplus of ¥1,962.4 billion.

# FY2015 Settlement Overview

## 1 Revenues

¥101,917.5 billion (down ¥166.0 billion, 0.2% year on year)

Regular portion: ¥97,511.0 billion (up ¥20.6 billion, 0.0% year on year)

Great East Japan Earthquake portion: ¥4,406.5 billion (down ¥186.6 billion, 4.1% year on year)

The increase of revenues in the regular portion resulted from an increase in local taxes. The decrease in revenues in the Great East Japan Earthquake portion resulted from a decrease in National treasury disbursements, etc.

## 2 Expenditures

¥98,405.2 billion (down ¥117.6 billion, 0.1% year on year)

Regular portion: ¥94,570.8 billion (up ¥59.6 billion, 0.1% year on year)

Great East Japan Earthquake portion: ¥3,833.4 billion (down ¥177.2 billion, 4.4% year on year)

The increase of expenditures in the regular portion resulted from an increase in Social assistance expenses, and subsidies, etc. The decrease in expenditures in the Great East Japan Earthquake portion resulted from a decrease in reserves, etc.

## 3 Revenue and Expenditure Settlement

Category	Settlement Period	No. of local governments with a deficit
FY2015	FY2014	FY2015	FY2014
Real balance	¥1,962.4 billion	¥1,838.3 billion	—	2
Single year balance	¥125.2 billion	▲¥119.8 billion	1,133	1,605
Real single year balance	¥501.8 billion	¥231.9 billion	1,055	1,502

Notes : Real balance refers to the amount calculated by subtracting the revenue resources that should be carried over to the next fiscal year from the income expenditure balance.

Single year balance refers to the amount calculated by subtracting the real balance of the previous fiscal year from the real balance of the relevant fiscal year.

Real single year balance refers to the amount calculated by adding reserves and advanced redemption of local loans for the public finance adjustment fund to the single year balance and subtracting public finance adjustment fund reversals.
## 4 Trend in Scale of Account Settlement

Both revenues and expenditures of the regular portion have increased for three consecutive years.

## 5 Major Financial Indices

Ordinary balance ratio declined 0.4 percentage points year on year, to 91.7%. Real debt service ratio declined 0.5 percentage points, to 9.9%.

Category	FY2015	FY2014	Change
Ordinary balance ratio	91.7%	92.1%	▲0.4
Real debt service ratio	9.9%	10.4%	▲0.5

## Outstanding Borrowing Borne by Ordinary Accounts

Outstanding borrowing, which includes outstanding local government borrowing as well as borrowing from the special accounts for Local allocation tax and Outstanding public enterprise bonds (borne by ordinary accounts), amounted to ¥199,084.9 billion (down ¥1,456.5 billion, 0.7% year on year).

Category	FY2015	FY2014	Change amount	Change rate
Outstanding local government bonds	¥145,514.3 billion	¥145,999.6 billion	▲¥485.3 billion	▲0.3%
Outstanding local government bonds (excluding Bonds for the extraordinary financial measures)	¥94,847.6 billion	¥97,496.6 billion	▲¥2,649.0 billion	▲2.7%
Outstanding borrowing from the special accounts for Local allocation tax	¥32,817.3 billion	¥33,117.3 billion	▲¥300.0 billion	▲0.9%
Outstanding public enterprise bonds (borne by ordinary accounts)	¥20,753.3 billion	¥21,424.5 billion	▲¥671.2 billion	▲3.1%
Total	¥199,084.9 billion	¥200,541.4 billion	▲¥1,456.5 billion	▲0.7%

Note : Outstanding public enterprise bonds (borne by ordinary accounts) are the Public enterprise bonds to be redeemed by public corporations from funds in the Ordinary accounts (amount based on surveys on local public finance).
## What are the revenue sources for local governments' activities?

## 1 Revenue Breakdown

The revenue of local governments consists mainly of Local taxes, Local allocation tax, National treasury disbursements, and Local bonds, in order of share size. Among them, revenue resources which can be spent for any purpose, such as Local taxes and Local allocation tax, are called General revenue resources. It is important for local governments to ensure sufficient General revenue resources in order to handle various administrative needs properly. In FY2015, General revenue resources accounted for 58.2%.

## Composition of Revenues (FY2015 settlement)

Local transfer tax : Collected as a national tax and transferred to local governments. Includes Local gasoline transfer tax, etc.

Special local grants : Special local grants in FY2015 include special grants for covering decreases in local tax revenues issued to cover decreases in revenues of local governments in association with the implementation of special tax deductions for housing loans in the individual inhabitant tax.

: An intrinsic revenue source of local governments in order to adjust imbalances in tax revenue among local governments and to guarantee revenue sources so that all the local governments across the country can provide a consistent level of public services. (See page.13, "6. Local Allocation Tax.")

: A collective term for the national obligatory share, commissioning expenses, incentives for specific policies, or financial assistance, disbursed from the central government to local governments.

: The debts of local governments to be repaid over a period of time in excess of one fiscal year for which redemption continues for more than one fiscal year.

Bonds for the extraordinary : Local bonds issued as an exception to Article 5 of the Local Finance Law to address shortages of General revenue resources of local governments. Proceeds from these bonds can be used for expenses other than investment expenses.

Note : “National treasury disbursements” includes “special grants to measures for traffic safety” and “grants to cities, towns and villages where national institutions are located.”
## 2 Revenues in Regular Portion and Great East Japan Earthquake Portion

## Net Total

## Prefectures

General revenue resources ¥30,888.8 billion (62.4%)

## Municipalities

Other revenue resources ¥8,751.0 billion (15.5%)

#### Local bonds ¥4,957.1 billion (8.8%)

Prefectural disbursements ¥3,550.4 billion (6.3%)

National treasury disbursements ¥8,470.5 billion (15.0%)

Of this amount, ordinary construction expenses were ¥440.0 billion (0.8%)

Of this amount, recovery and reconstruction expenses were ¥40.7 billion (0.1%)

☑ General revenue resources

Of this amount, ordinary construction expenses were ¥139.2 billion (6.1%)

Of this amount, recovery and reconstruction expenses were ¥62.4 billion (2.7%)

Of this amount, grants to measures for earthquake disaster reconstruction were ¥267.4 billion (11.7%)

Prefectural disbursements

¥394.8 billion (17.2%)

¥230.1 billion (10.0%)
## 3 Revenue Trends

The ratio of general revenue resources turned downward in FY2011, but have been rising since FY2014.

[] shows general revenue resources + bonds for the extraordinary financial measures.

Note: “National treasury disbursements” includes “special grants to measures for traffic safety” and “grants to cities, towns and villages where national institutions are located.”
## 4 Ratio of National Taxes and Local Taxes

The total of taxes collected as national and local taxes amounted to ¥99,068.0 billion. Of this amount, national and local taxes accounted for 60.5% and 39.5% respectively.

## 5 Local Taxes

Local taxes consist of prefectural taxes and municipal taxes.

Note : Municipal taxes collected by the Tokyo Metropolitan Government are included in municipal tax revenue figures, but not included in prefectural tax revenue figures.

## Composition of Revenue from Prefectural Taxes (FY2015 settlement)

## Composition of Revenue from Municipal Taxes (FY2015 settlement)
Prefectural tax revenues had been on a downward trend since FY2008, but have increased for four consecutive years since they turned upward in FY2012.

## Trends in Prefectural Tax Revenues

Municipal tax revenues remained at almost the same level for the past five years.

## 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)

Local taxes total

Individual inhabitant tax

Two corporate taxes

Local consumption tax (post settlement)

Fixed asset tax

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 exclude overassessment and discretionary taxes, etc.

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 (excluding local corporation special transfer tax) and excludes overassessment, etc.

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 January 1, 2016.
## 6 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 (in FY2015 33.1% for Income tax and Corporate tax, 50% for Liquor tax, 22.3% for Consumption tax, and the total amount of Local corporate tax).

The total amount of the Local allocation tax in FY2015 was ¥17,390.6 billion, down 0.2% 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 at the time of the effective date, and a “Small city” refers to a city with a population of less than 100,000.
# Expenditures

## What are expenses spent on?

## Expenses Classified by Purpose

Classifying the expenses by purpose 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 administrative expenses, and Civil engineering work expenses account for the largest amounts in that order.

## Composition of Expenditure Classified by Purpose (FY2015 settlement)

General administrative expenses : Expenses for general administration, financial management, accounting administration, etc.

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.

Educational 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.

Debt service : Expenses for the payment of principal, interest, etc., on debts.
## 3 Breakdown of Expenses Classified by Purpose

While Civil engineering work expenses and Agriculture, forestry and fishery expenses were on a downward trend, Public welfare expenses Significantly rose.

## Trends in Expenditures Classified by Purpose (Net total)

* Indices use FY2005 as base year of 100

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

## Breakdown of Public Welfare Expenses by Purpose

Net total

¥25,254.8 billion

¥610.6 billion (2.4%)

¥4,028.3 billion (16.0%)

¥8,074.3 billion

¥6,139.3 billion (24.3%)

¥613.0 billion (7.6%)

¥255.3 billion (3.2%)

¥7,885.0 billion (31.2%)

¥6,591.6 billion (26.1%)

¥1,584.7 billion (19.6%)

¥20,266.9 billion

¥323.5 billion (1.6%)

¥3,103.1 billion (38.4%)

¥3,813.9 billion (18.8%)

¥2,518.2 billion (31.2%)

¥7,291.1 billion (36.0%)

¥3,626.1 billion (17.9%)

¥5,212.4 billion (25.7%)

Disaster relief

Public assistance

Child welfare

Elderly welfare

Social welfare

## Breakdown of Educational Expenses by Purpose

Net total

¥16,795.5 billion

¥1,333.3 billion (8.0%)

¥2,907.7 billion (17.3%)

¥1,374.0 billion (8.2%)

¥1,249.8 billion (7.4%)

¥2,284.8 billion (13.6%)

¥2,829.0 billion (16.8%)

¥4,816.9 billion (28.7%)

Prefectures

¥11,022.1 billion

¥1,011.9 billion (9.2%)

¥2,113.4 billion (19.2%)

¥156.0 billion (1.4%)

¥189.3 billion (1.7%)

¥2,139.8 billion (19.4%)

¥2,026.9 billion (18.4%)

¥3,384.8 billion (30.7%)

### Municipalities ¥5,871.8 billion

¥326.5 billion (5.6%)

¥839.8 billion (14.3%)

¥1,232.4 billion (21.0%)

¥1,073.6 billion (18.3%)

¥155.0 billion (2.6%)

¥806.7 billion (13.7%)

¥1,437.8 billion (24.5%)

## Breakdown of Civil Engineering Work Expenses by Purpose

Net total

¥11,707.2 billion

¥655.3 billion (5.5%)

¥1,285.5 billion (11.0%)

¥4,174.3 billion (35.7%)

¥436.7 billion (3.7%)

¥1,261.9 billion (10.8%)

¥3,893.5 billion (33.3%)

### Prefectures ¥5,232.4 billion

¥282.6 billion (5.4%)

¥518.2 billion (9.9%)

¥892.7 billion (17.1%)

¥267.5 billion (5.1%)

¥1,106.3 billion (21.1%)

¥2,165.1 billion (41.4%)

### Municipalities ¥6,663.0 billion

¥391.2 billion (5.8%)

¥799.6 billion (12.0%)

¥3,341.2 billion(50.1%)

¥191.0 billion (2.9%)

¥170.5 billion (2.6%)

¥1,769.5 billion (26.6%)
## What are expenses used for?

## 4 Expenses Classified by Type

Expenses are also classified, according to their economic nature, into “Mandatory expenses” (consisting of Personnel expenses, Social 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, Reserves, Transfers to other accounts).

## Composition of Expenditures Classified by Type (FY2015 settlement)
## 5 Expenditures in Regular Portion and Great East Japan Earthquake Portion (Expenses Classified by Type)

## Net total

Prefectures

## Municipalities
## 6 Breakdown of Expenses Classified by Type

Social assistance expenses, Subsidizing expenses, Transfers to other accounts, and Goods expenses have been rising.

Trends in Expenditures Classified by Type (Net total)

$ ^{*} $ Indices use FY2005 as base year of 100

## Trends in Breakdown of Social Assistance Expenses by Purpose
Personal expenses for FY2015 increased year on year due mainly to the measures taken by each local government in accordance with the national government's measures to reduce salary payments to national public servants.

Trends in Personnel Expenses

Breakdown of Personnel Expenses by Item
Ordinary construction work expenses decreased year on year due mainly to a decrease in Subsidized public works. In addition, Civil Engineering Work Expenses account for the largest ratio in the breakdown of Ordinary construction work expenses by purpose.

## Trends in Breakdown of Ordinary Construction Work Expenses Classified by Type (Net total)

Breakdown of Ordinary Construction Work Expenses by Purpose
# 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 for the expenses for projects to properly address challenges caused by changes in the social economy and administrative needs so that they can adequately meet the needs of their residents. The extent to which the resources for such purposes are secured is called the “flexibility of the financial structure.”

## 1 Ordinary Balance Ratio

The FY2015 Ordinary balance ratio declined 0.4 percentage points year-on-year to 91.7%, staying above 90% for the twelfth consecutive year.

Ordinary balance ratio = $ \frac{\text{General revenue resources allotted to personnel expenses, Social assistance expenses, Debt service, etc.}}{\text{Ordinary general revenue resources, etc. (Local tax + Regular local allocation tax, etc.)} + \text{Special exception portion of loans for covering decreases in Local tax revenues} + \text{Bonds for temporary substitution of local allocation tax}} $ ×100

The Ordinary balance ratio is the proportion of General revenue resources allotted to Ordinary expenses such as Personnel expenses, Social 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.

Trends in the Ordinary Balance Ratio

* Special wards and partial administrative associations, etc., are not included in total and municipalities.

## Breakdown of the Ordinary Balance Ratio (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 measure the extent of the burden of the Debt service.

## Trends in the Real Debt Service Ratio

* Real debt service ratio : 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.

## 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 measure the flexibility of the financial structure by assessing the degree to which Debt service restricts the freedom of use of General revenue resources.
# Future Financial Burden

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

## 1 Trends in Local Bonds and Debt Burden

Real future financial burden by Local bonds and Debt burden amounted to ¥137,602.2 billion at the end of FY2015, down 0.7% year on year.

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

2. Debt burden is the amount scheduled to be expended in the following fiscal years.

## 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 ¥199 trillion at the end of FY2015.

Bonds for the extraordinary financial measures Outstanding local government bonds (excluding Bonds for the extraordinary financial measures) Outstanding borrowing from special account for local allocation tax and transfer tax grants Outstanding public enterprise bonds (in ordinary accounts)

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

2. Outstanding public enterprise bonds (borne by ordinary accounts) are the Public enterprise bonds to be redeemed by public corporations from funds in the Ordinary accounts (amount based on surveys on local public finance).
## Local Public Enterprises

## What is the status of local public enterprises?

## 1 Presence 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

8,614 businesses are operated by local public enterprises. By type of business, sewerage 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 ¥17,088.2 billion. By type of business, sewerage accounts for the largest ratio, followed, in order, by hospitals, total water supply, transportation, and residential development.
# Local Public Enterprises

## 4 Financial Status

Local public enterprises had a surplus of ¥731.6 billion. By type of business, water supply, electricity, gas and sewages showed a surplus.

## Trends in the Financial Status of Local Public Enterprises