||Facing the rapid development of Globalization and economic integration in the Asia-Pacific, Taiwan has promoted “Five Special Municipalities” in 2010 to strengthen the competitive capacity of the cities. However, there are only Taipei city’s own financial sources accounts for 80% of the annual revenue, while the others only account for 50% to 70% of the annual revenue, which means the financial autonomy is rather low. After the merger of Kaohsiung city and Kaohsiung County, the lack of fund due to the expanding of territories, the high proportion of Personnel expenditures in own financial sources, and the stagnant revenues result in running into debts for years to cover the lack of revenues. This made Kaohsiung city’s debt amount outdo the other cities. So it’s urgent for Kaohsiung city government to improve its finance. The low birth rate and the aging population are common phenomenon worldwide. And the low birth rate of Taiwan results in the acceleration of the trend of fewer children and the aging population. It should adjust government policy to meet people’s need. It’s also inevitable for local government finance being influenced by the trend of fewer children and the aging population. So it’s the urgent issue for local governments to reallocate budgets and avoid the waste of financial resources. |
The study’s research object is Kaohsiung city and analyzing the differences between its financial situation and the other four cities. The study will conduct interviews with experts to understand their opinions of local government finance situation, the low birth rate, the aging population and the affection to local government finance of the ossified personnel expenditures. For improving the problem of local finance, this study suggests that:
1. Control the ratio of current expenditure to annual expenditure.
2. Integrate educational resources in the face of low birthrate.
3. Reinvestigate upon the effect of social welfare policies, and introduce private fund into social welfare policies.
4. Raise tax base of land taxes to replenish municipal treasury.
5. Put partial government services out to external contractors and adjust the scale of public school faculties to cut low personnel expenditures.
6. Issue municipal bond to lower cost of financing.
7. Execute zero-base budgeting to cut unnecessary expenditures.
Keywords: local finance, fiscal structures, government expenditure, government revenues, merger of city and county