Reflecting the deepening economic slump, the Tokyo Metropolitan Government's draft fiscal 2002 budget, revealed Thursday, marks a 4.8 percent decrease from the initial budget for the current fiscal year, coming to 5.907 trillion yen.

It is the first time in two years that the budget would fall below the 6 trillion yen mark.

General expenditures, which exclude bond repayments and subsidies for municipal authorities, stand at 4.376 trillion yen, down 2.4 percent from the current fiscal year.

Despite the belt-tightening nature of its spending scheme, the metropolitan government plans to allocate resources generously on its priority items.

These include establishing a task force to crack down on illegal dumping of industrial waste. Measures to assist middle-aged job seekers make up another priority.

On the revenue front, the metropolitan government estimates that it will collect 4.034 trillion yen in taxes, down 360 billion yen from the current year. The drop is largely attributed to a steep fall in revenues from corporate taxes.

The metropolitan government estimates that a new hotel tax will bring in 1 billion yen.

Tokyo can bank on it

The Tokyo Metropolitan Government expects to collect more than 100 billion yen in fiscal 2002 from a local tax imposed exclusively on banks, according to its budget plan released Thursday.

The tax, which took effect in fiscal 2001, is levied on the gross revenues of large banks operating in Tokyo, bringing 102.9 billion yen in additional tax revenues to the metropolitan government's coffer in the current fiscal year.

While the banks reluctantly paid up this year, they also filed a lawsuit against the metropolitan government in October 2000, claiming the new local tax violates the principle of equality under the law and should therefore be nullified.

Court proceedings on the lawsuit ended Tuesday. A ruling is expected March 26.

If the Tokyo Metropolitan Government loses, it plans to appeal to a higher court. Banks are expected to refuse to pay the tax for the next fiscal year, forcing the compilation of an extra budget to compensate for the resulting shortfall, metropolitan government officials said.