Ninety-one percent of local government heads are concerned about the survival of their entities amid the aging society and shortages of fiscal funds, according to a survey released Sunday.
The results reflect their fear that their governments’ tough financial conditions cannot be rectified by spending cuts alone.
Seventy-three percent of the municipality heads favor raising the 5 percent consumption tax in the near future.
The Kyodo News poll was conducted in May and June on the governors of the 47 prefectures and 1,843 mayors, including those of Tokyo’s 23 wards. Responses were received from 1,884, or 99.7 percent.
Asked what policy the next prime minister should prioritize after 5 1/2 years of structural-reform initiatives under the administration of Prime Minister Junichiro Koizumi, 31 percent, the largest group, cited the need for the central government to help rebuild their finances.
Under Koizumi’s efforts to expand the fiscal autonomy of local governments, a three-year program through next March is in place to transfer 3 trillion yen worth of national revenue sources to local governments in exchange for scrapping grants tied to specific national programs.
The three-year program is also aimed at scrapping 5.1 trillion yen worth of local tax allocations under a mechanism to redistribute tax revenues to cash-short regions.
The survey showed 73 percent of the heads of local governments with populations of 500,000 or larger are concerned about even surviving.
At municipalities with populations of less than 5,000, 97 percent of their chiefs worry about survival.
Asked for one or two reasons for their worries, the largest percentage at 62 percent cited an expected deterioration in local coffers due to planned grant cuts by the central government.
On raising the consumption tax, which will undoubtedly become a major issue under the next administration, 73 percent said the tax should be raised “at an early date” or “in the near future.”
But 40 percent of prefectural governments and heads of major cities expressed caution about an early increase in the tax, citing the need to monitor effects of ongoing efforts to cut spending.
About 32 percent of those surveyed favor Koizumi’s structural reforms while 65 percent said the reforms have generated negative results.
Asked if they think social and economic disparities exists, 59 percent replied affirmatively, with many mayors of relatively large cities referring to an increase in the number of families on welfare.
Jun Iio, a professor at the National Graduate Institute for Policy Studies, said local governments have become distrustful of the central government’s decentralization campaign due to grant cuts.
Iio proposed that the central government diversify decentralization measures in light of different economic and social conditions depending on regional situations.
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