Local government debt reached NT$793.9 billion (US$26.09 billion) last year, with the six special municipalities comprising 81 percent of the total, or NT$644.5 billion, Ministry of Finance data showed.
Newly elected mayors and commissioners have rushed to implement social programs since taking office on Dec. 25, including cash payments to elderly people in Taipei and Taoyuan, and healthcare subsidies in Tainan.
Kaohsiung had the most debt among the nation’s special municipalities with NT$242.2 billion, followed by New Taipei City (NT$131.5 billion), Taichung (NT$99.9 billion), Taipei (NT$89.9 billion), Tainan (NT$51.4 billion) and Taoyuan (NT$29.5 billion), the data showed.
Chiayi City, and Kinmen and Lienchiang counties had no outstanding debt.
The remaining 12 regions had debt totaling NT$149.3 billion, ranging from NT$1.3 billion to Miaoli County’s NT$36.6 billion.
Yilan County had NT$19 billion, Changhua County had NT$17.6 billion, Yunlin County had NT$16.3 billion and Chiayi County had NT$12.8 billion, the data showed.
The Public Debt Act (公共債務法) stipulates that debt with a maturity of one year or more held by non-special municipalities cannot exceed 50 percent of the region’s total annual expenditure, a ministry official said.
Yilan County last year reduced its ratio to 36.87 percent after exceeding the threshold for many years, the official said.
However, the Executive Yuan approved a debt repayment plan that is to continue until 2027, so the case is still under tight management, they said.
In Miaoli County, the ratio still exceeds the threshold at 56.45 percent, the official said.
Despite the debt burden, many municipalities have announced expanded social welfare benefits.
Taipei Mayor Chiang Wan-an (蔣萬安) has announced the resumption of NT$1,500 cash gifts to elderly residents on the Double Ninth Festival.
The previous time the gifts were given was in 2015, when people aged 65 to 98 received NT$1,500 to NT$5,000 and those 99 or older received NT$10,000.
Taoyuan Mayor Simon Chang (張善政) has vowed to fulfill a campaign promise to increase bonuses for elderly people on the three major holidays, in addition to a Double Ninth Festival payment of NT$2,500.
Tainan Mayor Huang Wei-che (黃偉哲) has proposed offering healthcare subsidies of NT$3,000 to NT$20,000 for people 65 or older.
To prevent competition among local governments, the Directorate-General of Budget, Accounting and Statistics (DGBAS) in 2011 established an early-warning mechanism to avoid excessive spending.
The criteria have changed many times over the past decade, the official said.
According to the most recent revision last year, if there is a year-on-year increase in social welfare expenditure, local governments must notify the DGBAS, which could then cut subsidies to the local administration, the official said.
Taipei, Taoyuan and Tainan must report their plans to the DGBAS, the official said.
The Legislative Yuan’s Budget Center in a report said that excess welfare expenditure by municipalities had fallen from NT$38.4 billion in 2016 to NT$30.3 billion in 2018.
However, it climbed by 23 percent over the following three years to NT$37.4 billion in 2021, the report said.
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