The reform of local public finance was carried out along with the mergers of municipalities in the first half of 2000's in Japan. The tax revenue resources were devolved from the central government into the local ones, while the national treasury disbursement and local allocation tax were reduced. The stream has turned in FY2009 owing to the worldwide economic recession and the change in political administration.
Regarding all municipalities without 23 wards of Tokyo, the local tax revenue per capita increased by 4.1% and the local allocation tax per capita decreased by 11.9% between FY2002 and FY2009. In the meantime the national treasury disbursement per capita rose by 74.6%. For the small cities and towns in public financially difficulties, both of the local allocation tax per capita and the national treasury disbursement per capita or either of them contributed to maintaining the growth of the revenue per capita.
As the result, the ratio of national treasury disbursement to the revenue has expanded in all municipalities. A part of them in which population relatively grows have the advantage of structural bonus in the sense that the revenue per capita as well as population are increasing. But the rest where population declines has the disadvantage of structural burden. It is not sustainable for them to keep the level of revenue only through transferring the local allocation tax and the national treasury disbursement.