The financial pressure of the vice governor: many of the tax revenues are taken away by the city and the province

 The financial pressure of the vice governor: many of the tax revenues are taken away by the city and the province

Income is difficult to raise and expenditure is rigid. For Song Chen, this is the day, thinking every day, even when the meeting will be distracted, the head is full of where to raise income, the income falls on which expenditure.


In the past, Song Chen can dispatch 2 billion yuan of funds from the District, to the mayor there, a hundred million projects never open.

Song Chen recalled the days before, that was between 2014 and 2017. Now, five million yuan, I have to go to the mayor.

Now, what song Chen thinks every day is from where to raise funds, and then expend to which piece.

Open source, but for him, its not as simple as before. In fact, the revenue sources of local governments are clearly visible, including tax, land, income from the disposal of other assets, financing by financial institutions, revitalization of existing funds, and transfer payments from higher authorities.

Now, for local governments, it is very difficult for financing platforms to get financing from financial institutions. Because of the general trend, land is not easy to sell.

Song Chen tells a reporter, tax revenue of our district is not little, but big head was taken away by city and province. We have less than 30% of the total investment in urban infrastructure. For example, suppose that the value-added tax of 100 million yuan a month, the central government and the local government are divided into 5:5. But Song Chen definitely does not get 50%, because the three levels of provinces, cities and counties still have to share.

At present, the financial system below the provincial level is quite mixed, and there are various models. There is a need to guide reform. A financial expert told reporters.

Take Song Chen as an example. After the division between the central government and the local government, the local government left 50 million yuan. According to their way of sharing, 50 million yuan was left in the province, and part of the city remained in the big head. By the time of the district government where Song Chen was located, there were only over 10 million points.

That is to say, the tax collected within the jurisdiction of songchen is 100 million yuan, looking at a lot, but the funds that can be used are more than 10 million yuan.

Of course, not all of the local fiscal share is like this. For example, in Northeast China, the tax share is divided between the province and the county, but the land income of the county should be all transferred to the city.

What makes local fiscal revenue decrease is tax reduction and fee reduction. Song Chen has calculated that local revenue has been reduced by at least 20% because of tax reduction and fee reduction.

Recently, the Ministry of Finance released the report on the implementation of Chinas fiscal policy in the first half of 2020, which also pointed out that the impact of the epidemic led to the reduction of tax base, and the adoption of tax reduction and tax relief measures to support the prevention and control of epidemic situation, enterprise relief and resumption of work and production, which reduced the income growth by 10 percentage points.

At the Ministry of Finance and even at higher levels, we can also see the difficulties of local finance in 2020. On August 7, Liu Kun, Minister of Finance announced on the website of the Ministry of finance, said in an interview with the media that this year, the central government has given unprecedented support to local finance.

First, increase the transfer payment. This year, the central government transferred to local governments reached 83.91 billion yuan, an increase of 950billion yuan and 12.8 percent over the previous year, with the highest increase and growth in recent years. Among them, special transfer payment was arranged to RMB 605billion, which supported local finance to cope with the impact of epidemic situation to make up for the gap between income reduction and increase in expenditure and county level Three Guarantees; balanced transfer payment and county level basic financial support mechanism award and compensation funds increased by 10%, and transfer payment in the old and poor areas increased by 12.4%. Second, the policy of increasing the proportion of local financial funds in a prolonged period is implemented until the end of this year for the central and western regions and Liaoning provinces. The increased local reserve funds are about 55billion yuan, all of which are reserved for county level use. Third, special national debt for epidemic prevention is issued. In order to support local infrastructure construction and epidemic prevention and control, relieve difficulties of enterprises and stimulate market vitality, the special national debt of RMB 1trillion was issued, and the interest was fully borne by the central finance, and the principal should be paid jointly by the central and local governments.


Income is under great pressure, but expenditure is rigid. In other words, we can only open up resources to increase revenue and reduce expenditure.

With the aggravation of the downward pressure of the epidemic on the economy, the problems in the Three Guarantees expenditure in many places have been exposed, especially the problem of personnel wages. Song Chen told reporters that their district, in the past few decades, the jurisdiction area has expanded several times, the population has increased several times, and the establishment has not increased.

For example, with the increase of population in the jurisdiction area, the number of schools will also increase. If a new school is to be built, in addition to the funds related to the school, investment in infrastructure should be increased, along with sanitation, and police stations and other institutions. All of these need to be prepared and funded. There is no establishment, no budget, and only non staff personnel can be employed.

Now, every day, the salary of more than 20000 people who eat financial meals is what song Chen wants to guarantee, as well as peoples livelihood. At the time of wage expenditure of Three Guarantees, what song Chen gives priority to is the salary of sanitation worker, assistant police and teacher. Social stability needs to be maintained. If there is a problem with the wages of the co police, how can we maintain social stability? Among the expenditure on peoples livelihood, widows, widows, widows, the elderly, the weak, the sick and the disabled, all of which are to be spent and must be paid.

The situation that song Chen faces is not an example, a county financial figure in the eastern region told reporters that although it is cutting the budget, it is ineffective and inefficient, and try not to spend the budget reduction. However, the decline in income has been so severe that this years forecast is for revenue to fall by 30% and expenditure to fall by 15%. However, the basic expenditure on Three Guarantees is still growing. For example, the expenditure on Three Guarantees last year was about 3 billion yuan, and this year it is expected to be about 3.3 billion yuan. Only the financial support staff of 30000, which does not include those who are not equipped. Although the transfer payment of the three guarantees has increased in recent years, it is still a drop in the bucket compared with the whole financial plate.

Last year, the overall fiscal revenue of the above-mentioned counties and districts was less than 5 billion yuan, and the expenditure on the three guarantees was more than 3 billion yuan. However, compared with the total fiscal expenditure, the gap was about 1.3 billion yuan. It is estimated that the gap in 2020 will be about 1.5 billion yuan. We should also develop the economy and make projects, so we can only borrow money.