OSAKA -- Osaka Gov. "Knock" Yokoyama declared Wednesday that the prefecture is facing a financial crisis due to a serious shortage of tax revenues.
Osaka is the fourth prefecture to make such a declaration this year, after Tokyo, Kanagawa and Aichi.
According to the Osaka Prefectural Government, revenues from prefectural taxes this fiscal year are expected to fall 183.9 billion yen short of the initially projected amount.
The shortage was caused by the prolonged recession, according to local officials. The prefecture has thus been forced to make additional efforts to reduce spending, Yokoyama said.
At a meeting Wednesday, senior Osaka officials decided to suspend various prefectural projects as part of belt-tightening measures in an effort to cope with the crisis, the officials said. "The slump in tax revenues is expected to continue into the next fiscal year. It is an extremely serious situation," said Yokoyama, an entertainer-turned politician and former House of Councilors member.
The prefectural finances will be in the red this fiscal year for the first time since fiscal 1981, he said.
The prefectural government initially forecast 1.35 trillion yen in local tax revenues for fiscal 1998, but this was revised to 1.23 trillion yen in July.
However, the sharp fall in stock prices and the ailing economy forced the estimate to be further reduced to 1.16 trillion yen, Yokoyama said. As a result, the settlement of the account for fiscal 1998 will be in the red for the first time since fiscal 1981, he said. The total budget for fiscal 1998 is 2.87 trillion yen.