Yokoyama faces up to Osaka’s cash woes

OSAKA — Two years since he became governor of Osaka Prefecture on a wave of public outrage over political corruption involving his predecessor, former comedian “Knock” Yokoyama finds himself the target of discontent over the prefecture’s financial problems.

The governor has also angered voters by backing down on a campaign pledge not to use funds for further construction work at Kansai International Airport and for attempting to use taxpayers’ money to bail out a failed waterfront project. In an exclusive interview with The Japan Times, Yokoyama outlined the current state of Osaka Prefecture’s finances. He said he remains optimistic that the situation will turn around, and expressed hope that the troubled Rinku Town complex will eventually serve as a major international commerce and residential center.

Yokoyama, who ran as an independent, took office after his predecessor, Kazuo Nakagawa, was embroiled in a series of financial scandals involving his support groups. Nakagawa’s supporters chose to nominate Takuya Hirano, a former bureaucrat, as his replacement. But Osaka voters elected Yokoyama, who entered the race only a few weeks before the election.

Yokoyama took office just as the bills for public works spending by previous administrations were due. Combined with a sluggish economy, the prefecture’s financial condition worsened until this year, when the budget faced a deficit of 200 billion yen. Although this deficit was eventually covered, Osaka’s financial problems are far from over.

“For the 1998 fiscal year, Osaka Prefecture is looking at a budget deficit of more than 200 billion yen,” Yokoyama said. “We are currently discussing with the central government ways in which we can restructure.”

Yokoyama said one of the things the central government does not want to do is increase the tax burden on the local population. Given the prefecture’s severe financial condition, however, it may have no choice.

A large part of the reason for the current difficulty lies in the failure of third-sector projects. One such project, Izumisano Cosmopolis, has already gone broke and Rinku Town is in serious trouble with nearly 180 billion yen in bonds outstanding.