Especially affected by the epidemic, real estate developers have a hard time, the government's land can't be sold, and the financial pressure is also great, sorting out the fine income of ordinary cities in prefecture-level cities across the country. Among the first 14 prefecture-level cities, Jiangsu accounted for 7, namely Yancheng, Changzhou and Xuzhou. In fact, there are three main sources of income for local governments, one is normal taxes, the other is transfer payments, and the other is land sales income. Especially because of the deepening reform of taxation, transfer payment can only reach the provincial level now, so many local governments have few sources of economic income and have to raise taxes through fines.
In the past two years, affected by the epidemic, the economic growth rate has slowed down sharply, and the transfer payment ability between prefecture-level cities has also weakened. Local governments are highly dependent on land sales revenue. However, judging from the current trend, the land fiscal revenue continues to decline, and many local governments have accumulated a lot of local debts, which is very stressful.
As the government's revenue sources are reduced, it has to rely on fines to increase urban income. I think the government can appropriately increase revenue and reduce some rigid government expenditures to maintain the normal operation of institutions. However, if we only increase revenue without reducing expenditure, the government's debt will only increase, and even if we increase more fines, it will not solve any problems. This is also some negative effects brought by the dependence of many local governments on land policies, especially the continuous decline of land fiscal revenue, which makes the government's life even more difficult.