Prime Minister Junichiro Koizumi's decision to reduce subsidies and budget allocations to local governments has local officials frantically crunching the numbers to balance their budgets.
The city of Kawaguchi, Saitama Prefecture, with a population of about 500,000, was denied money from the national budget for the first time in 10 years in fiscal 2006 because its tax revenue rose. But city officials says they still needed the money.
"Tax revenue may slightly increase also in the future, but our financial condition is never satisfactory," said Junichi Hashiguchi, head of the city's finance section.
"There are many schools requiring quake-resistance work, but how should we secure the financial resources? As the man in charge of the finances, it's a headache."