The mounting debts of Taiwan's local governments are not only marginalizing counties and cities outside of the five special municipalities but are also driving them into pauperism, a politician-turned-scholar said Sunday. Peng Pai-hsien, who had served as Nantou magistrate and is now a professor of finance at Kainan University in northern Taiwan, made the remarks at a seminar discussing the financial situations faced by the local governments as a new page was turned a day earlier with the launch of Xinbei, Taichung, Tainan and Kaohsiung as special municipalities, putting them on an equal administrative footing with Taipei. He pointed out that both the central and local governments have been piling up debts so high that it is no longer feasible to just amend the tax revenue distribution law or the public debt law. 'The real problem is that the domestic sources of tax are limited,' he said. Recalling a 2008 incident which 12 county or city governments ran out of funds and could not pay salaries to their employees, Peng said the new administrative regions will make non-municipal cities and counties so marginalized they might end up being 'beggar' cities and counties. He quoted the latest amendment to the tax revenue distribution act as reporting that the central government will give the five municipalities NT$60.7 billion out of the NT$98.2 billion budgeted for all local governments. This will do little to alleviate the total debt burden of NT$803.4 billion in the five municipalities, which includes their shares of the labor and health insurance expenditure, pension payments and subsidies for retired government employees eligible for preferential interest rates for their term deposits, Peng said, quoting 2009 government statistics. Peng said a fairer -- and more reasonable -- formula to distribute national tax revenues would be to adopt a national 'per capita' standard for public services that include teachers, policemen, firefighters and environmental protection officers, based on which tax money is assigned to each local government. An urgent task to get the nation out of the financial mess is to overhaul the government's finance structure, a task that calls for the newly elected municipal mayors to submit a long-range land-use plan and an administrative rezoning plan by 2014, when their term of office expires, he said. Echoing Peng's proposal, Chen Chin-chi, a think tank researcher, recommended that the power of the central and local governments should be redefined in such a way as to satisfy the principles of local autonomy and financial autonomy. 