The Research On Township Fiscal Dilemma And Its Shaking Off Route

As the most basic of five classifications fiscal system, township finance plays an important role in basic finance management, local taxes organization and regional economy development. Since the fiscal system reform of tax sharing system in 1994, the financial contract system was replaced by tax distribution fiscal framework. The tax sharing system redefined the fiscal power and administrative authority between central and local governments, which led to concentration of financial resources and promotion of macro-control ability of central government. Meanwhile, administrative authority of central government is falling instead of rising, mismatching with fiscal power severely. The transfer payment system which is made to increase the subsidy for local financial resources can not be achieved because of the system incompleteness.The local fiscal revenue is weakened relatively. Due to governmental power hierarchical relationship, provincial and municipal government fiscal revenues are relatively centralized while township fiscal revenue at the grass root is thin gruel. As a result, township government’s few choices are to depend on extra-budgetary revenue, mainly land revenue, to make up for the public budget funds deficiency or debt financing by land mortgage through investment platform to meet the fiscal system requirement of fiscal balance, fulfill the increasing public affairs and meet infrastructure construction needs. However, it will eventually turn out to be short-term behavior. In the long term, land is non-renewable resource that decides the mode of filling grass-roots government financial gap by sale of land is non-sustainable. Meanwhile, the country pays more attention on farmers’land problem by increasing farmers’share of land sale and strengthening the Index of land use constraints on local governments which makes them more difficult to gain fat profit by land sale. Therefore, to make a research on township governments fiscal dilemma and its reason, and why township governments have no power and condition to walk out is more urgent.This thesis adopts fiscal decentralization theory and public choice theory, makes overall analysis and case study. Through comparative analysis and quantitative analysis, the thesis expatiate township governments fiscal dilemma performance, analyze the cause and takes W town of T city as evidence. Moreover, the thesis emphasizes on the analysis of why township finance cannot get ride of land dependence and the constraints, thereby proposes relevant suggestions and countermeasures.The research background is the 3rd Plenary Session of 18th CPC Central Committee proposed to establish uniform urban and rural construction land market and reform imposes land system which means local government can no more gain huge profits from land sale. This thesis analyzes how township finance walks out of fiscal dilemma in land deficiency from such an unique perspective, which makes up important research value and significance.