Osaka – Facing possible bankruptcy, the city of Kyoto has drafted a financial restructuring plan that would trim its bureaucracy, reduce the number of elderly residents eligible for bus and subway discounts and cut spending on day care centers.
“I deeply regret the fact that we’ve been forced to rely on special measures in order to manage our finances,” Kyoto Mayor Daisaku Kadokawa said Tuesday when announcing the plan. “We’ll tackle all manner of reforms without making anything sacred.”
Kyoto faces a financial shortfall of nearly ¥280 billion over the next five years. In April, Kadokawa warned the city could be looking at possible bankruptcy unless it figured out a way to come up with ¥160 billion in either cost cuts or additional revenue by the end of fiscal 2025.
The plan, which must be approved by the Kyoto Municipal Assembly this autumn, calls for reducing the city bureaucracy by more than 550 employees and raising the minimum age of those eligible for discounted fares on public transport from 70 to 75.
In addition, subsidies to day care centers will be reviewed. Parents could face higher fees or the loss of some services if the city cuts funding. Kyoto provides subsidies of about ¥24 million per day care center, which are used to help finance the salaries of workers.
Other proposals to raise revenue include increasing the fees for municipal facilities. The city is also looking into raising transportation fares.
These cost cuts and possible price hikes are necessary, Kadokawa says, due to past projects that are in the red — two municipal subway lines, for example, are ¥5.4 billion in debt. The construction costs for one of them — the Tozai Line, which connects Kyoto station with the city center — were ¥546.1 billion, or 1.4 times the initial price tag, and the line has since been underutlized.
The coronavirus pandemic has brought Kyoto’s tourism industry to a standstill, and neither subway line is generating the revenue it did in the pre-pandemic years when Kyoto was booming as a domestic and international tourist destination.
In 2019, Kyoto drew 53.5 million tourists, of which about 8.8 million were from abroad. Together, they spent around ¥1.2 trillion — the fourth straight year the figure had topped ¥1 trillion.
The city also faces challenges in gaining additional revenue by other methods, such as increasing local property taxes. Kyoto’s temples and shrines, the reason so many tourists visit, as well as wooden buildings such as traditional machiya, have lower property tax rates than more modern buildings, but it is difficult politically — as well as not that significant financially — to raise revenue that way.
Nor is the city considering placing additional taxes on universities. University students make up about 10% of the city’s population and also receive various kinds of assistance from the city, which will be reviewed, however.
By subscribing, you can help us get the story right.