Research On Countermeasures Against Difficulties Of County Finance In Jilin Province

The county finance is a foundation of a state finance. Operating situation of the county finance is directly related both to social and economic development of a county and to stability of an organization of political power at the grass-roots level in our country. It even affects state fiscal operating, sustainable development of economy, stabilization and harmony of the whole society. Since reforming and opening, with economy developing continuingly and rapidly, state financial situation steps into a new and prosperous stage, however, in the meanwhile, the county finance is facing an increasing difficulties. In recent years, central and local governments have adopted some measures to relieve the conflicts between revenue and expenditure. Although some achievements had been made, the financial situation of county did not get rid of difficult position. Taking Jilin province as a case and referring to basic theory of fiscal decentralization, this paper proposes some solutions and suggestions to relieve county fiscal difficulties on the basis of analyzing basic status of the county finance, fiscal difficulties and their causation.This article includes four parts:The first part focuses on the basic theory of fiscal decentralization. This part notes and analyses responsibility range of root level government, necessity of public finance of root level government, public service provided by root government, public finance boundary of root level government and fiscal relationship between higher authorities and local governments. Boundary of public finance in root level government is determined by the range of public affairs supplied by root level government. That's to say, the public fiscal expenditures of a county must meet the needs of public products in their sovereignty areas. To assure public expenditures, root level governments have the power to get tax revenue in their control areas. Fiscal expenditures should be arranged effectively on public products and services afforded by root level government, and the public products must be selected by citizens in their areas out of external influence. In revenue aspects, based on principles of beneficiation, the local governments not only make decisions on local public affairs, but also are possessed of the fiscal resources to carry out these decisions and policies.The second part notes the operating situation of county finance. This part analyses thoroughly the revenue and the expenditure structure of county finance on the basis of the current fiscal management situation of Jilin province and county finance's role in provincial finance. At present, county general fiscal revenue in Jilin province consists of two parts; local fiscal revenue and fiscal subsidy by higher authorities. Local fiscal revenue includes tax and non-tax revenue. The source of tax revenue comes from value added tax, business tax, enterprise income tax, individual income tax, urban construction tax and contract tax. The fiscal subsidy mainly comes from tax reimbursement, salary adjusting transfer subsidy, non-restricted transfer payment, restricted transfer payment and county fiscal difficulty reduction transfer payment. Local fiscal revenue shares lower percent in county general fiscal revenue, and the higher proportion of fiscal subsidy suggests that the self-supporting ability of county finance is rather weak. County fiscal expenditure includes following; capital construction expenditure, agriculture expenditure, educational expenditure, medical and health expenditure, social security expenditure, executive fees, public and judiciary expenditure, etc... Expenditure items remain unchanged for some years, but agricultural and health expenditures increased, which is related to problems involved in agriculture, rural areas and peasantry and people's well-being, this proves that the structure of county expenditures is upgrading, but the increase of fiscal revenue fall far behind fiscal expenditure's increasing need.The content of third part illustrates problems and causation of county finance difficulties. This part analyses difficulties of county finance in Jilin, discusses the history causation in fiscal revenue, fiscal expenditure and fiscal system. Problems in fiscal revenue lie in: volume of county economy is small, undeveloped, short of tax source; fiscal portion is low, not coordinated with economy development; fiscal revenue structure is unreasonable, especially, high increase of non-tax revenue can't afford enough fiscal power to local government; private economy is not strong and its contribution to finance is low. Problems in fiscal expenditure is as following: function of county finance is too much and undertakes high pressure; expenditures in law grow too fast and exceed the bearing capacity of county finance; the amount of finance borne personnel is always too big and makes finance burden heavier; reform of fiscal management is lagging out and efficiency of expenditure is lower. Talking about fiscal system, fiscal power cannot match administrative rights, expenditures of local governments exceeds their capacity, fiscal transferring are not standard, complicated in forms and not rational. The expenditure division of central government and local government is not reasonable, central power is too centralized. The fourth part of this paper is about how to relieve the difficulties of Jilin's county finance. This part synthesizes the previous analysis and accords difficulties and formation cause of county finance, and comments on how to deepen fiscal reform, strengthen fiscal ability of self-supporting and optimize expenditure structure, then puts forward suggestions and countermeasures to relieve county fiscal difficulties. On how to deepen fiscal reform, this part proposes that the administrative rights and expenditure scope of county finance should be adjusted and unites finance and administrative affairs; definite county fiscal revenue, adjusts share tax's sharing portion, remakes tax increment reimbursement regulation in order to guarantee county governments' main tax categories getting stable revenue and legislative right to make tax policy; establish scientific fiscal transfer system, adjusts transfer structure, increases transfer volume and better transfer system under provincial level and make matching legislation and performance appraisal system. On strengthening fiscal ability of self-supporting, we should make policies about tax preference to accelerate private economy developing and elevate its contribution to finance; support leading enterprises and key projects, stronger future fiscal resources, enhance fiscal self-supporting ability; provide some policy to push service trade developing in stride; execute tax laws fully, prevent and rectify reducing and delaying behavior while taxing, without missing tax objects. On optimizing expenditure structure, the paper concludes that we should make a deep reform in fiscal expenditure management, redefinition the bound of local fiscal supply, improve budget preparation means, perfect government procurement system further, accelerate the building-up fiscal expenditure performance appraisal system; control increasing of fiscal provision for personnel, pushing forward actively institutional reform for institutions, build perfect society security mechanism, perfect supervising and restricting mechanism, use encouraging and rewarding mechanism to control fiscal provision for personnel,, strong fiscal creditor's rights and debt management, establish watch-keeping mechanism for local fiscal risks.