Study Of Issue Municipal Bond As An Alternative Source Of Funding For Regional Development

From many research result related to regional finance, showed that Central Java province had APBD revenue was high enough which is reached the number above Rp2 trillion in two last budgets. In year 2006, from that number, 77.1 % derived from local own revenue. It means that only 22.9% Central Java revenue comes from intergovernmental transfer. Meanwhile, by 2008 Central Java needs Rp97.291 trillion of capital investment for infrastructure development. This number reach by government is estimated [by] only 30%, thus more or less 70% (Rp68.108 trillion) requirement of defrayal for development can be fulfilled from other source. From the data hence fiscal capacity owned by Central Java Province still in such a way limited. For the period in 2004 - 2006 regional own revenue experienced the rise in average 25.66% and the rise contribution to total regional revenue in general reached 26.76% per year . As alternative solution to finance development projects, local government tried to get the source of funding through the publication of the regional bond. This research paper tried elaborates and analyses issue of area bond as one of alternative of source of development funding for local government in Central Java.