Department of Finance

On August 28th, You Shih-ming, the commissioner of the Department of Finance, Taipei City Government, visited Mary Beth Thompson, the Chief Financial Officer of Salt Lake City, Utah, USA. This visit aimed to foster a bilateral exchange on financial affairs. Salt Lake City serves as the capital and largest city of the state of Utah in the United States. The city's budget comprises two main categories: the Governmental Funds and the Proprietary Funds. The Governmental Funds include the General Fund, Capital Projects Funds, Special Revenue Funds, and Debt Service Funds;  the Proprietary Funds include Enterprise Funds and Internal Service Funds.

For the fiscal year 2024, Salt Lake City's General Fund revenue amounted to USD 444 million. Converted at an exchange rate of 1:32, this equates to approximately NTD 14.2 billion. While this figure is lower than Taipei City Government's budget of about NTD 180 billion, considering Salt Lake City's population of about 200,000 compared to Taipei's 2.5 million, it showcases impressive revenue generation capabilities. Within the USD 444 million revenue of the General Fund, 37% is derived from sales and use taxes, roughly USD 166 million, while 26% comes from property taxes, about USD 114 million. On the other hand, Taipei City's property taxes, composed of land and house taxes, constitute around 25% of its total revenue, slightly lower than Salt Lake City's. Additionally, equivalent to the sales tax, business tax is a significant revenue source for Salt Lake City, whereas, it falls under national rather than local tax in Taiwan, with the central government redistributing a portion of these taxes to local governments.

Currently, Salt Lake City has a USD 123 million General Obligation Debt, which is well below the statutory cap of 4% of the fair market value of its property (USD 49.835 billion). This indicates the city could potentially borrow up to USD 1.87 billion. Since Mayor Chiang Wan-an took office, Taipei City has reduced its debt by NTD 7.4 billion, decreasing the actual debt from NTD 89.8 billion to the current NTD 82.4 billion, leaving room to borrow over NTD 400 billion from reaching the debt ceiling.

Salt Lake City's Finance Department comprises six divisions, including Accounting &Financial Reporting, Policy & Budget, Purchasing & Contracts, Administrative Audits, Revenue Operations, and Treasurer’s Office. This structure emphasizes financial aspects more compared to Taipei City's Department of Finance, which also manages city-owned property development. The performance of Salt Lake City's financial department is measured by maintaining General Fund balances between 15% and 18%, and it holds an AAA credit rating. Most U.S. cities get credit ratings, which is different from our credit rating agencies in Taiwan that only rate the central government. According to the World Council on City Data (WCCD) rating indicators, Taipei City's debt service ratio, calculated by dividing estimated debt expenses by self-generated revenue, is 4.2%, lower than many cities including Los Angeles, London, and Amsterdam. Given both Salt Lake City and Taipei City's commendable financial management, the financial leaders from both sides used this opportunity to discuss the contents of a Financial Discipline Agreement, with plans to sign it after legal procedures, aiming to jointly strive for fiscal discipline.