Commissioners and mayors of seven cities and counties yesterday signed a joint letter demanding that the central government adjust its loan capacity structure and debt ceiling limits so that local governments can avoid potential bankruptcy, amid a proposed amendment to the Public Debt Act (公共債務法).
Led by Chiayi County Commissioner Helen Chang (張花冠), the seven cities and counties urged the central government to increase the debt limit for 16 cities and counties, excluding the five special municipalities, from 1.43 percent of the average GDP of the previous three years, to 2.63 percent.
Hsinchu and Keelung cities, as well as Pingtung, Yunlin, Yilan and Hualien counties also sent representatives — lawmakers or deputy commissioners — to the press conference at the legislature.
Under the Cabinet’s proposed amendment, total public debt at all levels of government would be capped at 50 percent of the average GDP for the previous three years. A debt limit of 41.2 percent would be set for the central government, 7.25 percent for the special municipalities, 1.43 percent for the remaining 16 counties and cities, and 0.12 percent for all villages and townships.
Chang said the plan was unfair for the 16 cities and counties and has once again shown the imbalance of fund allocation between various levels of governments.
The debt capacity for the special municipalities would be 5.07 times that of the 16 cities and counties, despite the municipalities having a combined population that is only 2.23 times that of the smaller cities and counties, said Chang, who initiated the recommendation on Dec. 5.
The seven commissioners and mayors recommended revising the debt structure so that the central government would give up 1.2 percent of its capacity to the 16 cities and counties, Chang said.
They also recommended lowering the debt ceiling for local governments from 45 percent of the annual budget to 80 percent.
According to Chang, Yilan County, Miaoli County and Hsinchu City have all exceeded their debt ceilings, and five other local governments, including Chiayi County, are close to reaching their debt limits.
The recommended measures would not change the state of local governments’ finances overnight, but are expected to ease the fiscal burden, Chang said.
“No one wants to incur debt and we know the nation’s finances are in a difficult condition, but the truth is that local governments have suffered from unfair budget allocations for decades and the resulting financial hardship has impeded local development,” Pingtung Deputy Commissioner Chung Chia-ling (鍾佳濱) said.
DPP Legislator Liu Chien-kuo (劉建國), who represented Yunlin County at the press conference, warned the government against ignoring poorer cities and counties and only paying attention to the densely populated special municipalities.
“The Constitution stipulates that each and every citizen should be treated the same way and the government should not make some people ‘A-class’ citizens and others ‘B-class,’” Liu said.