The financial crisis in Sagamihara City, Kanagawa Prefecture is expected to result in a cumulative overspending of over 80 billion yen over a seven-year period. However, as Sagamihara City implements the reform plan, the Fiscal Adjustment Fund has rapidly recovered to 20.8 billion yen by the end of fiscal 2022. Local governments that pay less taxes have smaller budgets. As the budget decreases, expenses for various cultural facilities will be cut. Expenses for many cultural facilities such as parks, sports facilities, and libraries will also be reduced. However, some municipalities are not satisfied with just saving money, so they have created a system to earn money. Regional development in Shiwa Town, Iwate Prefecture, is a famous model for this. Town volunteers have leased town-owned land that had been abandoned for more than 10 years, and are developing it into a business district centered around the library that boasts the ability to attract more than 800,000 visitors a year. Even though Shiwa Town’s population is decreasing, local taxes are increasing. We would like to realize such a municipality.
Return to Sagamihara City. In principle, the city “frozen” new projects in the initial budget for fiscal year 2020. In fiscal 2021, the city created an austerity budget with almost no new projects. In the face of the fiscal crisis, Sagamihara City has carried out a thorough review of expenditures. However, reducing spending alone will reduce services to citizens. With limited finances, the city also used the power of the private sector to come up with measures to enhance the city’s appeal. Sagamihara City is aiming to formulate a new plan after soliciting citizen opinions. One of these plans is to expand the number of consultation support counters and secure human resources for welfare, and to shift the focus from providing benefits to creating a support environment.
From a private perspective, unused public facilities can be considered a treasure trove. Detroit, once the epitome of America’s poorest cities, has recently been gaining momentum. Detroit will introduce a system that allows citizens to manage and operate city parks free of charge. The appointed citizen became an entrepreneur selling hot dogs in the park. In exchange for giving them the right to sell in the park, the city makes them manage and clean the park. The city saves money on staff, and the hot dog shop makes a profit from sales. Public facilities that were dormant will now generate profits. Instead of using taxes, land and facilities that are not being used effectively can be used to revitalize local economic activity. Improving the financial health of local governments will protect the lives and health of residents.
