How to read Japanese municipal finances

Japanese local government accounts use many technical terms. Here are the indicators used on this site, in plain English.

Three things to look at first

Where the money comes from. The more a municipality raises in its own local taxes, the less it depends on national transfers. Municipalities with a small tax base receive the local allocation tax (chihō kōfuzei) to close the gap.
How much room there is. Personnel costs, social assistance and debt repayments must be paid every year. When they are large, little is left for new projects — measured by the current balance ratio.
Debt and reserves. Local bonds outstanding and reserve funds. Borrowing is in principle used for long-lived assets such as roads and schools, so having debt is not bad in itself; the burden of repayment is measured by the real debt service ratio.

Indicators on this site

Fiscal strength index 財政力指数

How much of the standard cost of public services a municipality can cover with its own tax revenue. Above 1.0, it receives no ordinary local allocation tax from the national government.
Higher is healthier See the ranking

Current balance ratio 経常収支比率

Recurring costs that must be paid every year (personnel, social assistance, debt service) as a share of recurring general revenue. The higher it is, the less room for new spending; above 90% is considered rigid.
Lower is healthier See the ranking

Real debt service ratio 実質公債費比率

Debt repayments relative to revenue (3-year average). At 18% or more, new borrowing needs approval; 25% or more triggers early fiscal soundness measures.
Lower is healthier See the ranking

Future burden ratio 将来負担比率

Debts and other future liabilities as a percentage of one year's standard revenue. For municipalities, 350% or more triggers early fiscal soundness measures. Zero when reserves exceed liabilities.
Lower is healthier See the ranking

Local bonds outstanding per resident 住民1人あたりの借金（地方債残高）

Outstanding local government bonds at fiscal year-end divided by the population.
Lower is healthier See the ranking

Reserve funds per resident 住民1人あたりの貯金（基金残高）

Fiscal adjustment, debt reduction and special-purpose funds at fiscal year-end divided by the population.
Higher is healthier See the ranking

Debt minus reserves per resident 住民1人あたりの「借金−貯金」

Local bonds outstanding minus reserve funds, per resident. Negative means more reserves than debt.
Lower is healthier See the ranking

Fiscal adjustment fund ratio 財政調整基金の大きさ（標準財政規模比）

The freely usable reserve (fiscal adjustment fund) as a percentage of standard annual revenue. Around 10–20% is considered comfortable.
Higher is healthier See the ranking

Own-source revenue ratio 自主財源比率

The share of revenue the municipality raises itself: taxes, fees, charges and similar.
Higher is healthier See the ranking

Local taxes per resident 住民1人あたりの地方税

Local tax revenue (resident tax, fixed asset tax and others) divided by the population. See the ranking

Spending per resident 住民1人あたりの歳出

Total general account spending divided by the population. Small towns tend to spend more per resident. See the ranking

Mandatory spending ratio 義務的経費の割合

Personnel costs, social assistance and debt service — spending that is hard to cut — as a share of total spending.
Lower is healthier See the ranking

Construction spending ratio 建設事業費の割合

Ordinary construction spending (roads, schools, facilities) as a share of total spending. See the ranking

Welfare spending per resident 住民1人あたりの福祉の支出（民生費）

Social welfare spending (elderly, children, people with disabilities, public assistance) per resident. See the ranking

Child welfare spending per resident 住民1人あたりの子どもへの支出（児童福祉費）

Child welfare spending (nurseries, child allowances, medical subsidies for children) per resident. See the ranking

Education spending per resident 住民1人あたりの教育費

Education spending divided by the population. See the ranking

Hometown tax donations received ふるさと納税の受入額

Donations received through the furusato nozei (hometown tax) program. See the ranking

Staff per 1,000 residents 住民1,000人あたりの職員数

General account staff per 1,000 residents. See the ranking

Population (resident register) 人口（住民基本台帳）

Population in the basic resident register. See the ranking

Population change (5-year census) 人口の増減率（国勢調査・5年）

Population change between the two most recent national censuses.
Higher is healthier See the ranking

Other terms

Ordinary accounts (futsū kaikei): The general account plus similar special accounts, defined by MIC so that all local governments can be compared on the same basis. Public enterprises such as water, sewerage and hospitals, and national health insurance, are excluded.
Standard fiscal scale: The size of the general-purpose revenue a local government is expected to receive in a standard year. Often used as the denominator of indicators.
Local allocation tax: A share of national taxes distributed to local governments whose own revenue falls short, so that residents everywhere can receive a standard level of public services. Its use is not restricted.
National treasury disbursements: Money from the national government for specific programs, such as public assistance, child allowances and school construction.
Local bonds: Local government borrowing, mainly for construction. Some, such as special deficit-financing bonds (rinji zaisei taisaku-sai), are borrowed in place of the local allocation tax.
Reserve funds: A local government's savings: the fiscal adjustment fund (smooths revenue between years), the debt reduction fund, and special-purpose funds.
Early fiscal soundness / fiscal rehabilitation: When the soundness ratios (real deficit, consolidated real deficit, real debt service and future burden ratios) exceed set thresholds, a local government must adopt a fiscal soundness plan; worse cases come under national supervision as a "fiscal rehabilitation" organization.

Fiscal year

Japan's fiscal year runs from April to March. FY2024 is April 2024 to March 2025.