After Taoyuan was upgraded, it continued to promote major construction such as an aviation city, MRT Green Line, and underground railways. In recent years, it has entered a peak of project and funding investment, and the financial pressure of the city government has become the focus of the city council. The Municipal Planning Office pointed out that as of the end of last year, Taoyuan’s public debt for more than one year was approximately 27 billion yuan, and the total long-term and short-term public debt was approximately 34.6 billion yuan. Annual debt interest payments increased from approximately 240 million yuan in 2020 to nearly 1 billion yuan last year, and approximately 267.5 billion yuan in major policy program funds have yet to be prepared and raised. Councilors are worried that the construction peak may further increase the financial burden, and require the city government to fully disclose the debt and fund allocation situation.
DPP city councilor Peng Junhao pointed out that at the end of last year, although public debt for more than one year decreased by 1.13 billion yuan compared with the previous year, short-term debt increased by 1.669 billion yuan, and the overall debt still increased by 539 million yuan. He is also concerned about the city treasury’s allocation of approximately NT$60.9 billion to special funds and government custody accounts, as well as about NT$52.9 billion in future contingent liabilities such as pension funds. He believes that the city government cannot just publish a single debt figure, but should fully disclose long-term and short-term debt, fund allocation and contingent liabilities, so that citizens can understand Taoyuan’s overall financial situation.
Kuomintang City Councilor Lin Zhengxian said that the total long-term and short-term public debt of Taoyuan is about 34.6 billion yuan. Although it has not exceeded the legal limit, annual debt interest payments have increased by about 2.71 times. He pointed out that the city government issued 6 billion yuan in perpetual bonds last year, with a yield rate of about 1.375% to 1.6%, which is lower than the average long-term borrowing rate of about 1.75%. Therefore, it is recommended that the city government take stock of high-interest bank borrowings and evaluate replacing part of the borrowings with public bonds or perpetual bonds to reduce interest expenses.
Other councilors Xu Qiwan and Zhang Shuofang questioned that Taoyuan was allocated 66.4 billion yuan for overall taxation. After deducting subsidies and electricity bills, the financial resources it can use independently are limited, and there is still a budget shortfall of 11.7 billion yuan in 2015. Shu Cuiling approved the central government's reduction of 14.8 billion yuan in subsidies, which may affect social housing and major construction, and questioned the public engineering and financial problems left over from the previous administration.
In this regard, Finance Director Ou Meiluo said that Taoyuan’s current per capita debt is about 14,700 yuan, which is still the lowest among the six cities. She said that Taoyuan was upgraded relatively late, and major projects such as the Airport City, MRT and railway undergroundization are currently at the peak of expenditures. The city government will adopt a rolling approach to raise funds based on construction needs, funding levels and market conditions; borrowings will be held at lower interest rates through bidding, and will also negotiate with banks to reduce interest rates based on market conditions.
Ou Meilu emphasized that the public bond interest rate is affected by the timing of issuance and the market environment, and is not necessarily lower than bank borrowing. The city government will not borrow money for borrowing. If the inventory funds are sufficient, the debt will be repaid in advance to avoid idle funds.
Cai Jinman, Director of the Accounting Department, also said that the current construction expenditure for MRT and underground railways is at its peak, and construction funds have reached the highest peak in history, and there will still be a large demand for funds in the future. The city government will continue to review the fiscal allocation on a rolling basis based on the project implementation progress, budget usage and financial resources status, and strike a balance between promoting major construction and maintaining fiscal health.
