Shih-Chang Huang, Director of the Third Research Division at the Chung-Hua Institution for Economic Research (CIER), stated that as Taiwan’s most populous municipality, New Taipei City faces challenges in developing public infrastructure, upgrading its industries, allocating fiscal resources, and ensuring long-term sustainability. As the mayoral election enters a critical stage, candidates have begun proposing policy agendas covering transportation infrastructure, industrial development, and social welfare. From the public economics and fiscal governance perspective, the central challenge for local government is no longer simply securing funding for development projects. It must also balance fiscal responsibility, public value, and intergenerational equity while operating with limited resources.
According to audit reports from the New Taipei City Audit Office, New Taipei City’s recent fiscal performance shows that annual revenue exceeded expenditure for four consecutive years from 2021 through 2024. Outstanding public debt also fell from approximately NT$118 billion at the end of 2023 to NT$103.4 billion at the end of 2025. However, annual revenue totaled approximately NT$210.6 billion in 2025, while expenditure reached about NT$215.5 billion, resulting in a deficit of approximately NT$4.9 billion. This indicates that the city’s fiscal balance continues to require close attention.
Narrowing Operating Surplus Presents Challenges for Medium-Term Fiscal Planning and Existing Commitments
Huang noted that the proposed 2027 general budget requires close scrutiny. Recurring revenue is projected to increase by approximately NT$14.7 billion compared to the previous year’s budget, while recurring expenditure is expected to rise by about NT$21.8 billion. As a result, the operating surplus is projected to decrease by approximately NT$7 billion, which may reduce the fiscal resources available for capital expenditure.
The overview of medium-term capital expenditure plans attached to the proposed budget indicates that multiyear capital projects under government oversight will require approximately NT$116 billion in additional funding from 2028 to 2031, with a further NT$95.4 billion needed from 2032 onward. These figures reflect future funding requirements for existing infrastructure projects, not new debt. When formulating new policies, the incoming mayor must consider these existing commitments alongside long-term fiscal obligations such as pension payments under the previous system.
The new mayor will assume responsibility for budget preparation beginning in fiscal year 2028, making fiscal planning for the subsequent four years especially critical. The allocation of resources among existing infrastructure projects, essential expenditures, and new policy initiatives will directly influence the city government’s policy flexibility and fiscal resilience.
Major Campaign Proposals Require Cost-Benefit Analysis to Balance Infrastructure and Public Welfare Needs
Huang noted that Kuomintang candidate Shu-Chuan Lee’s proposals include the Dahan River MRT Trunk Line, the Danbei Express Line, the underground relocation of the railway in Shulin, and the New Taipei Dome City, with an emphasis on transportation infrastructure and regional development. Democratic Progressive Party candidate Chiao-Hui Su has proposed the Danhai Science City, support for young entrepreneurs, family housing for young people, and family care policies, with a focus on industrial innovation and generational needs.
Although the two sets of policies have distinct objectives, both should be evaluated using consistent fiscal and benefit assessment criteria. Huang stated that transportation and major infrastructure projects should be assessed not only by construction costs but also by their potential to reduce commuting times, stimulate regional employment, and generate future operating and maintenance expenses. Industrial investment and social welfare policies should be evaluated for their medium- and long-term impacts on human capital, labor force participation, family care, and local economic development.
Policy assessments should extend beyond the scale of budgetary investment. They should also identify funding sources, determine how future expenditures will be financed, and quantify the anticipated economic and social benefits of each policy. Consistent evaluation standards would enhance the efficiency of public resource allocation and prevent policy commitments from exceeding the city’s long-term fiscal capacity.
Strengthen Three Fiscal Governance Mechanisms to Turn Public Spending into Improved Well-Being for Residents
Huang urges the incoming mayor to prioritize three key areas for stronger local fiscal governance.
First, the city should establish an integrated medium-term fiscal plan. Rolling assessments should incorporate revenue forecasts, multiyear infrastructure commitments, changes in debt, fund finances, and future payment obligations. The city should also disclose this information regularly to enhance fiscal transparency.
Second, the city should establish a cost-benefit assessment mechanism for major new policies. Whether they involve transportation infrastructure, industrial investment, or social welfare, proposals should disclose estimated costs, funding plans, expected benefits, and medium- and long-term fiscal implications. This transparency would help residents understand each policy’s resource requirements and real value.
Third, the city should strengthen performance tracking for public expenditure. In addition to reviewing budget execution rates, it should assess improvements in residents’ daily lives. Relevant indicators may include shorter commuting times, increased employment opportunities, lower housing costs, and enhanced family care. These outcomes should serve as a key basis for future budget allocations.
Huang stated that the focus of fiscal governance in New Taipei City is shifting from whether the city has sufficient funds for development to how it can balance fiscal responsibility with public value. Given existing infrastructure commitments and future expenditure requirements, the incoming mayor must go beyond presenting a development vision. The city should establish fiscal governance mechanisms that are transparent to residents, practical for the government to implement, and financially sustainable over the long term. With these mechanisms in place, New Taipei can advance urban development while safeguarding fiscal stability and improving residents’ well-being.
Author: CIER Editorial Team
Date: October 22, 2026