Causes of local fiscal crises.
The root cause of the local fiscal crisis lies in the mismatch between the financial resources of the local government and the expenditure responsibility, that is, the so-called "imbalance between fiscal decentralization and administrative power". Specifically, the fiscal revenue of the local government mainly depends on the transfer payment and land transfer income, while the fiscal expenditure responsibility mainly includes basic public services, infrastructure construction, social security, debt repayment and interest payment, etc., and the scope and standard of these expenditure responsibilities are often formulated by the government, while the local government lacks the corresponding autonomy and adjustment ability. This has led to the fact that the local government is subject to the changes in the fiscal policy and macroeconomic situation on the revenue side, and is facing increasing financial pressure and social expectations on the expenditure side. In order to make up for the fiscal gap, the local government has to increase non-tax revenue through land finance, hidden debt, arbitrary fees, etc., or reduce fiscal expenditure by compressing public expenditure, defaulting on accounts, evading supervision, etc., which not only damages the public interest and market order, but also buries the hidden danger of debt risk.
Response to the local fiscal crisis.
In order to effectively solve the local financial crisis, it is necessary to carry out comprehensive measures from many aspects, focusing not only on short-term emergency relief, but also on long-term structural reform. Specifically, you can start from the following aspects:
Increase tax revenues. Taxation is the main fiscal revenue and the most stable fiscal revenue. In order to increase tax revenue, it is necessary to optimize the structure of the tax system, expand the tax base, improve tax efficiency, strengthen tax collection and management, crack down on tax evasion and evasion, and protect the legitimate rights and interests of taxation. At the same time, it is necessary to rationally divide the tax distribution rights of the local government, increase the tax autonomy of the local government, improve the fiscal self-sufficiency rate of the local government, and reduce the dependence on transfer payments.
Streamline spending. Expenditure is the main item of fiscal expenditure, and it is also the most flexible item of fiscal expenditure. In order to streamline expenditure, it is necessary to clarify the functions and responsibilities of the government, reasonably divide the power of expenditure between the government and the localities, and match the financial resources with the expenditure responsibilities. At the same time, it is necessary to persist in living a tight life, practice strict economy, reduce unnecessary administrative expenditures, optimize the structure of public expenditures, improve the efficiency of public expenditures, and avoid redundant construction and waste.
Improve debt management. Debt is a financial financing tool and a source of financial risk. In order to raise the level of debt management, it is necessary to standardize the issuance and use of debts, strengthen debt monitoring and early warning, control the scale and risks of debts, establish a mechanism for handling debt risks, and prevent debt defaults and crises. At the same time, it is necessary to actively reduce debt leverage, improve the debt structure, and reduce debt burden through such methods as debt-to-equity, debt-for-assets, and debt-for-equity swaps.
Promote economic growth. The economy is the basis of fiscal revenue and expenditure, and it is also the fiscal goal and means of the first fiscal goal. To promote economic growth, it is necessary to deepen reform and opening up, stimulate market vitality, optimize the business environment, cultivate new momentum, enhance competitiveness, and enhance development stamina. At the same time, it is necessary to adhere to high-quality development, transform the development mode, adjust the development structure, innovate the development model, enhance the endogenous force of development, and achieve sustainable development.
Introduce external assistance. External aid is a financial supplement and a means of financial coordination. To introduce external assistance, it is necessary to strengthen communication and coordination with other places, international organizations, social organizations, etc., and strive for more fiscal transfers, financial assistance, financial loans, financial donations, etc., to alleviate financial difficulties and enhance fiscal resilience. At the same time, it is necessary to make rational use of external aid, abide by relevant regulations, improve the efficiency of the use of funds, and prevent the creation of new financial burdens and risks.
Reform the system and mechanism. The institutional mechanism is the institutional guarantee of the financial operation of the first country, and it is also the source of power for the financial innovation of the first country. In order to reform the system and mechanism, it is necessary to improve the financial legal system, establish a modern financial system, promote budget reform, realize all-round budget management, and enhance financial transparency and the effectiveness of supervision. At the same time, it is necessary to deepen the reform of the fiscal and taxation system, adjust the financial relationship between the local government and the local government, enhance the financial autonomy and responsibility of the local government, improve the local debt management system, standardize the local debt management behavior, and prevent the generation and spread of local hidden debts.
In short, the local fiscal crisis is a complex socio-economic phenomenon that needs to be analyzed and resolved from multiple angles and levels. Only through scientific theoretical guidance, effective policy measures, coordinated working mechanisms, and innovative institutional mechanisms can we effectively resolve the local financial crisis, realize the healthy development of local finance, and provide strong support for the country's financial security and economic stability.