The Counties’ Financial Difficulties And Countermeasures

As the basis government of our country, the county government plays an significant role in the realization of the national political, economic, social stability and harmonious development. However, county government is the weakest link in our five government levels of our country. There are many county government deficits, and even debt. The counties’ financial difficulties not only restrict the quantity and quality of public products and service, but also affect the construction of China’s public finance and service oriented government. Therefore, it has the important practical significance to study on the county’s financial difficulties seriously and explore the effective countermeasures.Fiscal function is the unite of "responsibility" and "function" which fiscal department with its own.Under the condition of market economy, the functions of the department of finance mainly includes resource allocation, income distribution and economic stability and growth.And the realization of fiscal function needs three important conditions, including powers of matter, powers of finance, incentive and restraint mechanisms, which in particular to the financial business, the budget management system and other aspects. It has important meaning to choose a good starting point for analyzing and solving the financial difficulties of the county. So based on the financial perspective, this study considers that the main reasons for counties’ financial difficulties are : at the respect of powers of matter, the boundary of government and the market id not clear, and the division of powers between levels of government is unknown; at the respect of powers of finance, the financial revenue is more toward the higher authority government, the tax distribution system and structure is not perfect; and the transfer payment system is not sound; at the respect of incentive and constraint mechanism, the performance evaluation mechanism is not regular, the restraint mechanism is weak and so on.Even though the divisions of fiscal function, powers of matter and finance are not same, the developed countries and the major developing countries have many common characteristics which mainly reflected in: first, the high legalization degreeof fiscal function; Second, the clear division of fiscal powers at all levels; Third,follow the matching principle of powers of matter and finance;Fourth, implement the transfer payment pattern corresponding to its own national conditions; Fifth,combine finance rights’ centralization and powers of matter’s decentralization, but supplemented by local autonomy to some degree,at the same time implementing the corresponding incentive and restraint mechanisms. The experience of the countries has important inspiration and guidance for China’s county to solve the finance difficulties.The accurate definition and reasonable classification of county’s fiscal functions is not only an important way to solve the county’s financial difficulties, but also an inevitable requirement of China’s tax system reform. Therefore, we should combine with the current situation of our country’s finance function and use the experience of other countries for reference, through the further improvement of our country’s finance function scientific classification and management system, to effectively solve the county’s financial difficulties. Specific including: further clarify the various levels of government powers, and promote the legalization of powers; perfect the tax distribution below the province, strengthen the construction of the local tax system and improve the transfer payment system to solve the problems of powers of finance; improve the incentive mechanism to the county government, build an effective performance appraisal system, establishing an effective performance appraisal and supervision system.