The Analysis On Performances And Reasons Of Local Fiscal Risks

Local fiscal risks are the possibility that the local fiscal difficulties occur, the local government operates hard, the local economy declines, and the damage to the social stability. Local fiscal risks are very harmful, because the local government is responsible for providing directly to local residents of public goods and public service, and directly faces the residents. Local fiscal crisis will make significant welfare losses for the local residents.Local fiscal risks refer to the risk of local fiscal income, the risk of local fiscal expenditure, the risk of local fiscal deficit and the risk of the local fiscal debt. In China's current circumstances, local fiscal risks mainly refer to the risk of land finance, the risk of financing platform and the risk of local fiscal expenditure. Among them, the risk of land finance includes the unsustainability of land and the risk of land finance. The risk of financing platform includes the origin, positive role and risks of financing platform; the risk of local fiscal expenditure includes the budget risk, decision-making risk and structural risk. Because local obligation and resources is unequal, the gap of local fiscal revenue and expenditure occur, and local government can get huge profits from land leasing, "land finance" has become the second fiscal revenue. Through land mortgages and fiscal subsidies, financing platform acquire large commercial loans to invest local infrastructure and urban reconstruction project from the banks. So it increases the risk of payments. In China, there is much inefficient situation of fiscal expenditure, this kind of circumstance need to be reversed. Considering the reality and integrity of fiscal data, this paper has taken Jiaozuo as a case, making empirical analysis of the risk local fiscal income, the risk of local fiscal expenditure, the risk of local fiscal deficit and the risk of the local fiscal debt.Local fiscal risks are caused by the inequality of the local fiscal obligation and resources, the necessity of fiscal expenditure increases, the mechanism of assessment oriented with GDP, and the soft restriction of fiscal behavior. For the reasons, to avoid the risk of financing platform, perfecting the mechanism of tax-distribution, strengthening the constraints of local fiscal behavior are the three procedures to solve local fiscal risks.