MEDIA SOERJO Vol. 14 No. 1. April ISSN

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1 MEDIA SOERJO Vol. 14 No. 1. April ANALYSIS OF REGIONAL INCOME BASED ON ELASTICITY OF LOCAL REVENUE (PAD) AND GROSS REGIONAL DOMESTIC PRODUCT (GDP) ON LOCAL GOVERNMENTS NGAWI REGENCY ABSTRAKSI By 1. AR. Djoko Purwito 2. Rachmawati Koesoemaningsih 3. Sutawa Penelitian tentang analisis pendapatan daerah ditinjau dari Elastisitas Pendapatan Asli Daerah (PAD) dan Produk Domestik Regional Bruto (PDRB) Kabupaten Ngawi ini bertujuan untuk menganalisis secara empirik tentang pengaruh elastisitas Pendapatan Asli Daerah dan Produk Domestik Regional Bruto terhadap pendapatan daerah Kabupaten Ngawi. Adapun permasalahan yang diajukan dalam penelitian ini adalah bagiamana elastisitas Pendapatan Asli Daerah dan Produk Domestik Regional Bruto secara parsial terhadap pendapatan daerah Kabupaten Ngawi tahun Model analisis menggunakan analisis elastisitas. Adapun hasil penelitian sebagaimana tercermin dalam kesimpulan menunjukkan bahwa hasil uji elastisitas terbukti bahwa jika terjadi perubahan Pendapatan Asli Daerah (PAD) dan Produk Domestik Regional Bruto (PDRB) masing-masing sebesar 1 persen maka akan diikuti perubahan pertumbuhan pendapatan daerah Kabupaten Ngawi sebesar 4,12 persen untuk PAD dan 3,21 persen untuk PDRB. Berbagai saran dalam penelitian ini adalah Pemerintah Kabupaten Ngawi harus memberikan perhatian serius terhadap laju pertumbuhan PDRB sehingga dengan begitu Pemerintah Kabupaten Ngawi akan dapat mengontrol dan meningkatkan pendapatan daerah Kabupaten Ngawi; Pemerintah Kabupaten Ngawi harus mampu mengendalikan perekrutan pegawai baru, sehingga pendapatan daerah yang sebagian besar bersumber dari dana operasional umum (DAU) tidak terserap habis untuk belanja pegawai seperti yang terjadi selama ini. Kata Kunci : Pendapatan Asli Daerah, Produk Domestik Regional Bruto, dan Pendapatan Daerah. A. Introduction The economic crisis ever experienced by Indonesia has shown some weakness of the national economy. Various distortions that have occurred in the past has weakened the foundations for national economic resilience. Coupled with less inequality in the spread of the implementation of development has made the growth gap regions, between urban and

2 MEDIA SOERJO Vol. 14 No. 1. April rural areas, between the western region of eastern Indonesia. Such conditions underlying the emergence of Act No. 22 of 1999 on Local Government which was then revised by Act 32 of 2004, on the Fundamentals of Regional Government. The emergence of this legislation marks a further making efficient use of each region to implement autonomy in accordance with the law. Regional autonomy is basically giving a broad and real authority and responsibility in accordance with such legislation. So the essence of decentralization on the principle of justice between the ability and the right area; increase local revenues through increased local revenues so as to lessen the subsidy from the center. It also encourages the development of the region to match the aspirations of each region. In the face of the implementation of the law, then one of them that need to be prepared is the determination of regional distinctiveness which is seeded with human resource potential, institutional and local physical resources as capital for increased economic activity ( Propenas ). Local governments are required to be ready to accept the burden and the responsibility with regard to its potential to organize and manage his own household. In the sense that local governments city / regency should be encouraged to be able to improve the ability to take advantage of existing opportunities, as well as explore new sources of potential to regional income. Local fiscal autonomy to be one very important aspect of the overall regional autonomy. This is possible because local fiscal autonomy basically describes the ability of local governments city / county in increasing local revenues as increasing revenue through taxes, levies and other legitimate sources. Nevertheless the fact that occurred in Indonesia at this time that the fiscal area in Indonesia is still relatively low because the area has not been able to pay for routine expenses and still rely on the General Allocation Fund ( DAU ), which comes from the central government. As said Halim (2001 : 348 ) that autonomy can be realized only if accompanied by an effective financial system. In addition, local governments should be financially independent from the central government to the road as much as possible to explore the potential to be a source of local revenue ( PAD ) or other legitimate income to increase local revenues. Furthermore, by Halim noted that while local revenue sources include: 1 ) local revenue ( PAD ) ; 2 ) General Allocation Fund (DAU) ; 3 ) Fund Balance Non General Allocation Fund (DAU); 4) Other legal acceptance, and the substantial amount of the loan. Based on a literature review can be seen that there are many factors that could potentially affect local revenue for exemples potential of the region, the quality of human resources, economic growth, inflation, population growth, GDP, local revenues, general allocation

3 MEDIA SOERJO Vol. 14 No. 1. April fund, a special allocation fund, and factors a factor that the other. Given so many factors that could potentially affect to regional income, so in this study is limited only factor of local revenue (PAD ) and gross regional domestic product (GDP). For Indonesia, a large population can clearly positive or negative impact. The positive impact when a large number of people can be managed in ways that can be used as a driver of development, such as the potential market for goods and services produced by the community. In addition, the availability of cheap labor that is needed in the development process and can produce a wide range of quality products. Conversely, a large population such as Indonesia can also have a negative impact, such as increasing unemployment figures, especially if employment is not increased, it can inhibit the development of which can lower per capita income ( decline in social welfare ), and a decline in purchasing power. Besides potentially cause other social problems such as education, human settlements issues, transportation issues, issues of health care and other social issues that directly or indirectly affect to regional income. While the growth rate of GDP is considered as a measure of a regional economic growth, so it can not be separated from the role of government spending in the public service sector ( Wibisono, 2003:71). Further stated that the local government expenditure is measured from the total routine and development expenditures are allocated in the budget local. The larger the area of productive government spending, then the increase rate of the economy of a region. Local government spending is largely determined by the ability of local governments to raise local revenue. Further local revenue ( PAD ) is the most important source of financing when viewed from the local revenue sources for the amount of the local revenue (PAD) will demonstrate the ability of local government autonomy. The problem faced by the Government of Ngawi Regency is that the financial capability in fiscal year is still rely on the General Allocation Fund (DAU) as themain source of financing in the amount of Rp. 796,833,553,000, - while local revenue (PAD ) Ngawi is still very low, amounting to Rp. 65,682,402,798, - (Document of Regional Finance Management of Ngawi Regency). Based on the background of the above problems of this research problem is formulated as follows: 1) How does the elasticity of local revenue ( PAD ) to the regional income Ngawi Regency in ?; 2) How does the elasticity of Gross Regional Domestic Product (GDP ) to the regional income Ngawi Regency in ? In general, this study aims to analyze the elasticity of factors that affect the regional income Ngawi. While this study specifically aims :

4 MEDIA SOERJO Vol. 14 No. 1. April ) Analyze the elasticity of revenue (PAD ) to the regional income Ngawi Regency in ; 2) Analyze the elasticity of Gross Regional Domestic Product ( GDP ) to the regional income Ngawi Regency in The results of this study are expected to be useful as follows :1) Adding to the repertoire of studies on regional income, especially in relation to the local revenue (PAD) and gross regional domestic product ( GDP ); 2) Provide contributions to government officials ( especially apparatus of local government Ngawi Regency ) which can be input in the decision making in the future; 3) For further research is expected to develop studies in areas relevant to the development of science and by using more complex methods. Furthermore, under Article 157 of Law No. 32 of 2004 stipulated that local revenue source consists of : 1 ) local revenues that furthermore referred as PAD, namely : a) the results of local taxes ; b ) the results of retribution ; c ) the results of the wealth management area separated ; and d ) other legal PAD ; 2 ) fund balance ; and 3 ) other legitimate income areas. Complementing it is also regulated by the Regulation of the Minister of Interior No. 13 of 2006 on local revenue sources include: a ) local taxes ; b ) Local Retribution.; c ) Results of Regional Wealth Management separated ; and d ) Other legitimate local revenues. 2. Releted Gross Regional Domestic Product (GDP) to Regional Income B. Study of Theory 1. Releted Local Renvenue (PAD) to Regional Income Local revenue (PAD) is revenue derived from sources within its own territory imposed under the legislation in force (Kajatmiko, 2006:77). According to Halim (2004:67), local revenue (PAD ) are all local revenue derived from economic resources in the area. In connection with the Santosa and Rahayu (2005: 49) suggests that the relationship between revenue by revenue is a functional relationship, because PAD is a function of local revenue. With the increased revenue it will increase revenues to fund development programs. Gross Regional Domestic Product GDP ) is the value added that is able to be created in various economic activities in a region ( Saberan, 2002: 5 ). Further explained that the term Gross Domestic Product ( GDP ) is a combination of four words, namely : First ; Products, meaning that the entire value of the production of both goods and services, Second ; Domestic, meaning that the calculation of the value of production is generated only by the factors of production that are within the domestic territory, regardless of whether the factors of production are controlled by a resident or not, these three; Regional, meaning that the calculation of the value of

5 MEDIA SOERJO Vol. 14 No. 1. April production is generated only by residents regardless of whether the factors of production used to be in the domestic territory or no, and four; Gross, the point is the calculation of gross production value because it still contains the cost of depreciation. Meanwhile, according to BPS (2003 ) that the Gross Domestic Product ( GDP ) is a tool for measuring the economic growth of a region. Based on the above definition it is clear that GDP is a tool for measuring the economic growth of an area / region. In the meantime is economic growth is the process of increase in real gross national product or real national income. So it can be stated that an economy can be said to grow or thrive in case of growth of real output. Or in other words that economic growth occurs when there is an increase in output per capita. In addition, economic growth indicates the increase of the standard of living as measured by real output per person. In the same manner as have argued that the development of regional gross domestic product (GDP) is one of the indicators used to assess the economic growth that is reflected in the development and structure of the economy in a region. In connection with the Halim (2004:117) writes that the local revenue is influenced by the Gross Domestic Product ( GDP ), while the increase in GDP will cause local revenues from taxes and levies sector increased. In line with these opinions, Saragih (2003 : 42 ) states that the higher one's income, the higher the person 's ability to pay various fees set by the government. Further stated that the concept is analogous to the larger macro GDP is obtained, then the greater the potential reception area. So it can be stated that with an increase in GDP, it indicates will be able to boost local revenues. C. Conceptual Framework Conceptual framework in essence argued about the pattern of relationships among the variables used in the study. In this study, the variable consists of 2 (two) independent variable ( X ) and 1 ( one ) dependent variable ( Y ). The independent variable consisted of a) Local revenue ( PAD ) and b ) Gross Regional Domestic Product ( GDP ) ( X2 ). Meanwhile, as dependent variable is the Regional Income ( Y ). Related to GDP, Saragih ( 2003 : 42 ) writes that the higher the income the higher the person's ability to pay various fees set by the government. Further stated that the concept of macro can be analogized that the larger GDP is obtained, then the greater the potential reception area. While associated with PAD submitted that the revenue is all local revenues derived from economic resources in areas such as local taxes and levies ( Halim, 2004: 67). While under Article 157 of Law No. 32 of 2004 stipulates that source of revenue consists of : 1 ) revenue hereinafter referred to as PAD, namely : a ) local tax

6 MEDIA SOERJO Vol. 14 No. 1. April revenue ; b ) the results of retribution ; c ) the results of the wealth management area separated ; and d) other legal PAD; 2) equalization funds; and 3 ) other legitimate local income. Of empirical studies obtained some results of such research conducted by Andi (2008 ), in a study analyzing the local revenue contribution to regional income, with a qualitative analysis model with the formula : ( PADSt / PDT ) * 100 %, where PADSt = own - source revenue in year t, PDT = reception area in year t. The conclusion that the relatively small PAD Local Government Kudus Regency (average % ) to the regional income. Furthermore Yuliati (2001 ) to analyze the time series models analysis fiscal capacity in the face of regional autonomy in Malang mention that to achieve independence invitation rely PAD + for the results, the effect is relatively faster than just relying on revenue alone. While calculating the ratio of revenue to GDP using current prices, showed unfavorable results. In addition, according to research results Riduansyah (2003 ) stated that the local revenue (PAD) is a significant source of revenue for routine financing and development in an autonomous region. Total revenue component of local taxes and levies is influenced by many types of local taxes and levies are applied and adapted to the regulations relating to the acceptance of these two components. While the results of research Datu (2010 ) who studied the factors affecting regional income in Makasar concluded that the GDP, government spending, and PAD significant effect on regional income in Makasar. D. Hypothesis According to a study of the various theories above, then the hypothesis in this research is formulated as follows : 1. It is assumed that elasticity of the local revenue (PAD) to regional income Ngawi Regency in are positive and > 1 or high enough. 2. It is assumed that elasticity of the gross regional domestic product (GDP) to regional income Ngawi Regency in is positive and > 1 or high enough. E. Research Methods 1. Sampling Techniques The sampling method used is Convinience Samples are easy sample ( Cooper & Emory, 2003: 113). It is based on the grounds that the documents were still allowed obtained during the last ten years. Therefore, the sample taken is the document number of local revenue PAD), gross regional domestic product (GDP), and regional income during the years Types and Sources of Data The type of data required in this research is secondary data obtained on documents stored

7 MEDIA SOERJO Vol. 14 No. 1. April in the Regional Finance Management of Ngawi Regency. And the data stored in the BPS Ngawi. Required data range in the archives of local revenue, GDP, and regional income since It also takes other supporting data relevant to research problems. 3. Data Collection Techniques Data search method using the method of documentary as the main method, namely gathering material corresponding document problems. In addition, searchable archives, books, journals, and the results of previous studies that have anything to do with the problems of research. Another method used is the method of observation as a backup method, which is a tool for collecting data by means of sensing against a phenomenon that became the target of research. 4. Operational Definition of Variables As has been stated before that the variables in this research consists of the local revenue (PAD) (X1) and gross regional domestic product (GDP) ( X2 ) as independent variables and regional income ( Y ) as the dependent variable. a. Local revenue ( PAD ) is a regular income from government efforts Ngawi Regency in harnessing the potential of local financial resources to finance their tasks and responsibilities. To measure this variable wearing rupiah unit. b. Gross regional domestic product ( GDP ) is the value of all goods and services produced in a year in a particular region and at the same time is one reflection of the economic progress of the region. To measure this variable wearing rupiah unit. c. Regional income areas is the reception area in the form of an increase in assets or decrease in debt from various sources in the relevant fiscal year period in Ngawi Regency. To measure this variable wearing rupiah unit. 5. Analysis Techniques Methods of data analysis in research using elasticity analysis models. The elasticity analysis as presented Mahi (2005 : 43 ) is intended to determine the sensitivity of changes in a type of regional income in the event of a change in the factors that influence. So the elasticity analysis in this study is intended to determine the level of sensitivity of regional income in the event of a change in the local revenue (PAD) and gross regional domestic product (GDP). The elasticity formula used is ( Devas, 2007: 42) :

8 MEDIA SOERJO Vol. 14 No. 1. April % Regional Income Ep = (2.1) % Local Revenue ( PAD) % Regional Income Ep = (2.2) % Gross Regional Domestic Product (GDP) The elasticity of the criteria used is when it is equal to or greater than 1 ( one ) otherwise good elasticity. I. Results and Discussion 1. Profile Ngawi As written in the history of Ngawi name is derived from the word " Awi " or " bamboo "which subsequently received additional nasal letters " ng " to" Ngawi. This is not surprising because in general in Indonesia, particularly in Java, many names of villages are connected with flora and fauna. An example of the appearance of the names of the regions Waringin Pitu, Ciawi, Durenan, Pelem, Warak and so on. Being fair if Ngawi derived from " Awi " which indicates a precise place around the edge of the " Solo River " and "Madiun River" that a lot of trees, bamboo or " awi ". This species has a very valuable meaning, namely : a) In Buddhism that developed in the past, the bamboo forest is a sacred place. This interrelated with King Ajatasatru after embracing Buddhism, he presented a " jungle filled with bamboo plants " to the Buddha Gautama ; b ) In the daily life of bamboo for rural communities have an important role especially in the period of this development ; c) Bamboo Trees in the Literature of beautiful also capable of inspiring supposition that soulful (archive Secretariat of Ngawi :1990). As stated in the document Ngawi in Figures 2012, the total area of km² Ngawi Regency. Ngawi located in the western region of the East Java Province is in position between ' ' east longitude and between 7 21 ' ' south latitude, is ± 181 km from the capital city of the East Java Province, as well as bordering the province of Central Java. Of the total population in 2011 amounted Ngawi inhabitants, consisting of inhabitants male and female population , spread over 19 districts, the majority of the population is ethnic Javanes, although there are also other tribes. This population is spread in 217 Village, distributed on 969 Circle society, Pillar of Members (RW), and District Society (RT). In Ngawi Regency flowing two (2) major rivers namely Solo and Madiun river. Of the two streams can be used to irrigate

9 MEDIA SOERJO Vol. 14 No. 1. April farmland in part in Ngawi Regency, so Ngawi become one of the granary of the East Java Province. The food is typical of his popular crispy tempe industrial centers located around campus Univiersitas Soerjo Ngawi, precisely in Karang Tengah Prandon. Ngawi Regency has various traditional arts, such as dance - orek orek, campursari, gambyong, bukinol gaple, wayang kulit, ketoprak, and so forth. That beside Ngawi Regency also travel both natural shades and nuances of history. The tourist spot natural shades such complex Jamus Tea Plantation, Sunset Reservoir Park, Bath Tawun, Srambang, Water boom and others. While the nuances of history, Trinil Museum, Soerjo Monument, Fort Van Den Bosch, and Srigati. 2. Population Ngawi Regency in The Year 2013 Conditions in Ngawi Regency by age as in the following table. Table 1 Total Population by Age Ngawi Year 2013 Age Male Female Total Total Source : Department of Population and Civil Registration Ngawi Regency 2013 From Table 1 above it can be seen that 72 % of the population are in the productive age group ( ages ), reaching inhabitants. The next group of children ( ages 0-15) reached % or some inhabitants, and the elderly ( aged 60 years and above) reached % or some inhabitants. From the description above it is clear that Ngawi has a huge asset for develop

10 MEDIA SOERJO Vol. 14 No. 1. April the area because of the number of productive age population reached 72 %. Nevertheless these assets optimally should be empowered so that they can really beneficial. Based responsibility report (LKPJ) Ngawi Regency in 2013 can be seen that the number of people who have not obtained employment amounted to inhabitants, means that approximately % of the population of working age. This is clearly a work that is not easily solved for the Government of Ngawi Regency. Nevertheless it should be given serious attention and special treatment so that they can find a way out that is effective and efficient. There are many factors that could potentially affect the number of unemployed society such as education, customs / traditions, and so forth. Based on the results of documentary studies obtained data on the population of Ngawi Regency as summarized in Table 2 below : Table 2 Total Population Ngawi Year Number Year Total Source : Department of Population and Civil Registration Ngawi Regency2013 Based on the results of the tabulation of data as shown in the table above it can be seen that the number of people Ngawi from 2004 through 2013 shows an upward trend that is controlled. This is evident from the average growth rate of %. Meanwhile, when seen from the increase in growth per year is seen that the increase from 2004 to 2005 of 0.44 %; from 2005 to 2006 rose by 0.61%; from 2006 to 2007 rose by 0.96 %; From 2007 to 2008 of 0.11 %; From the year 2008 to the year 2009 of 0.79 % ; From the year 2009 to the year 2010 increased by 0.32; The year 2010 to the year 2011 increased by 0.29 %. The highest increase occurred from 2011 to That is

11 MEDIA SOERJO Vol. 14 No. 1. April equal to 1.93 % or inhabitants. From 2012 to 2013 rose by 0.10 %. When viewed as a whole, the amount of the percentage increase in per year flugtuatif trend. The lowest increase occurred from 2012 to the year 2013 in the amount of 0.10 %. 3. Local Revenue ( PAD ) Ngawi Regency in The Year Data of local revenue ( PAD ) Ngawi Regency presented in Table 3 below: Number Table 3 PAD Ngawi Year Year PAD (in thousand ) Source : Department of Revenue Ngawi Regency. From Table 3 above, Ngawi local revenues during the period 2004 to 2013 shows an upward trend on average per year amounted to %. The increase in revenue Ngawi low of 0.92 %. occurred in The highest increase occurred in in the amount of % of the nominal or Rp.27,489,897,884,- to Rp.61,538,571,057,-. The increase is due to the soaring significant increase from a few sources of local revenue be like: other areas of legitimate income of the year is Rp ,- There was also an increase in taxes and levies area. The second highest increase occurred in in the amount of 48.37%. 4. DP Conditions Ngawi Regency in The Year From the review of documents in the field of data obtained GDP Ngawi Regency years as outlined in the following table :

12 MEDIA SOERJO Vol. 14 No. 1. April Table 4 GDP at Current Market Prices in Ngawi Regency Year Number Year PDRB (in thousand) Source : BPS Document Based on data collected as summarized in Table 4 it can be seen developments gross regional domestic product ( GRDP ) Ngawi Rgency during the period The average growth of gross regional domestic product ( GRDP ) Ngawi Regency during the period 2004 to 2013 is %. Furthermore, when seen growth per year from 2004 to 2005 grew by % ; From 2005 to 2006, a growth of % ; From the years 2006 to 2007, growth of %. From the years the growth of %, the growth in amounted to %, the growth in amounted to %, the growth of GDP in amounted to %, GDP growth in amounted to %, and growth in reached %. Focused on growth per month that can give you an idea that the highest GDP growth in Ngawi Regency occurred in the year , while the lowest growth in the year Regional Income Ngawi Regency in The Year From the results of data collection obtained local revenue picture Ngawi Regency year as summarized in the following table:

13 MEDIA SOERJO Vol. 14 No. 1. April Number Table 5 Regional Income Ngawi Regency Year Year Regional Income (in thousand) Source : Department of Revenue Ngawi regency Noting that the data are summarized in Table 5 above can be seen that regional income Ngawi Regency area during the period from 2004 to 2013 showed an uptrend. An example of the year increased by 3.36 %, from the year 2005 to 2006 showed an increase of 6.76%. Furthermore, the regional income of the year increased by %. The increase in the year of 8.13 %, and rose again in amounted to %. The increase in revenue was lowest in the region in in the amount of 3,36 %. When viewed as a whole, the increase in revenue highest Ngawi area occurred in which is an increase of %. This happens because there is an increase in income from several sources regional income, local revenue ( PAD ), which increased by %. In addition, there are also other hikes legitimate income that is in the amount of Rp ,- in 2010 to become Rp ,- in Likewise an increase in fund balance in the amount of Rp ,- in 2010 to become Rp ,- in Furthermore, also an increase in the General Allocation Fund ( DAU ) of the nominal value in the amount of Rp ,- in 2010 to become Rp , - 6. Analysis of Elasticity As has been stated that the elasticity analysis is needed to determine the sensitivity of regional income in the event of a change in the local revenue (PAD) and gross regional domestic product (GDP). The formula used is the elasticity of Devas.

14 MEDIA SOERJO Vol. 14 No. 1. April a. Elasticity of Local Revenue (PAD) to Regional Income Local revenue ( PAD ) as the first independent variable in the study also proved positive and significant impact on regional income Ngawi While the revenue growth elasticity test against local revenue Ngawi years 2004 to 2013 are summarized in the table 6 the following : Year Table 6 Elasticity PAD to Regional Income Ngawi Regency PAD (in thousand) Growth Regional Income (in thousand) Growth Elasticity , ,39 8, , ,01 8, , ,41 11, , ,48 0, , ,35-0, , ,19 0, , ,45 0, , ,89 1, , ,65 0,45 Everage ,60 22, ,20 17,09 3,43 Source : Data processed by the elasticity formula. From the calculation of elasticity as summarized in Table 6 above shows that in 2009 the value of the elasticity of local revenue to regional income obtained at -0.27, which means less than 1 and the negative, it means that the local revenue growth of 1% followed by a contraction in regional income (-) 0.27%. Furthermore elasticity figures in 2008, 2010, 2011, and 2013 respectively at 0.65; 0.58; 0.22; and 0.45 is smaller than, it indicates that the influence of the PAD to the regional income for the year is less elastic. Furthermore, the value of elasticity in 2003, 2004, 2005, 2006, 2007, and 2012 respectively obtained by 3.23 ; 4.90 ; 8.27 ; 8.18 ; ; and 1.47 are all greater than 1, this indicates that the influence of the PAD to the regional income is elastic. While the average value of elasticity is known of 3.43, it indicates that if the local revenue increased by 1 % then it will be followed by an regional income of 3.43 % or the area may be declared elastic. b. Elasticity of Gross Regional Domestic Product (GDP) to Regional Income Test the elasticity of GDP growth to regional income Ngawi Regency years are summarized in Table 7 below:

15 MEDIA SOERJO Vol. 14 No. 1. April Year Table 7 Elasticity of GDP to Regional Income Ngawi Regency GDP (in thousand) Growth Regionl Income (in thousand) Growth Elasticity , ,39 0, , ,01 9, , ,41 2, , ,48 3, , ,35 2, , ,19 1, , ,45 4, , ,89 0, , ,65 1,1 Everage ,30 6, ,20 17,09 2,86 Source : Data processed by the elasticity formula. From the calculation of elasticity as shown in Table 7 above it can be known that in 2005 the GDP elasticity to the regional income elasticity of 0.75 obtained value is smaller than 1, it means that the effect of GDP on regional income is less elastic. Similarly, in 2012 the regional income elasticity of GDP obtained a value of 0.77 or less than 1, so it can be stated that the effect of GDP on regional income less elastic. Meanwhile, for the elasticity of the row in 2004, 2006, 2007, 2008, 2009, 2010, 2011, and 2013 respectively by 9.41; 2.02; 3.35; 2.01, 1.84; 4.47; and 1.10, all of which is greater than 1. This indicates that the effect of GDP on regional income for the year is elastic. If the calculated average, the amount of elasticity is 2.86, which is significant when GDP rose 1 % will be followed by an regional income the amount of 2.86%, or could otherwise elastic. 7. Discussion Test results elasticity of local revenue ( PAD ) to regional income gained an average value of elasticity of 3.43 is greater than 1. It therefore means that indicates when local revenue growth by 1 percent, it will be followed by regional income growth of 3,43 percent. While the rate of growth elasticity ranged from percent to percent. So it can be stated that the hypothesis suspected local revenue (PAD) to regional income elasticity Ngawi Regency year is positive and > 1 or high enough proven and accepted as true. The

16 MEDIA SOERJO Vol. 14 No. 1. April results of the analysis of the income elasticity of PAD to regional income Ngawi Regency this area would suit writing Halim (2004 : 67) states that local revenue is all local revenues derived from economic resources in areas such as local taxes and levies. These results are also in line with the opinions Kajatmiko (2006 : 77) states that local revenue is derived from local revenue sources within its own territory that collect based on the legislation in force. Furthermore the GDP elasticity test against regional income obtained an average value of elasticity of 2.8, which means greater than 1. This means that if GDP growth increased by 1 percent, it will be followed by regional income growth of 2.86 percent. The elasticity of growth rate ranged from 0.75 percent to 9.41 percent. Based on these results, the hypothesis that reads allegedly GDP elasticity to the regional income Ngawi Regency year is positive and > 1 or high enough proven and accepted as true. Test results on the regional income elasticity of GDP this area presumably in line with the concepts put forward Saragih (2003 : 42 ) states that at the macro level can be analogous, the greater GDP obtained, the greater the potential reception are. Furthermore Saragih stated that the higher one's income, the higher the ability to pay a variety of fees set by the government. So with an increase in GDP, then this indicates that the region will drive increased regional income. From all the results of the test variable elasticity local revenue (PAD) and gross regional domestic product (GDP) to the regional income Ngawi Regency presumably in line with the opinion of Mahi (2005 ) which states that the elasticity analysis can be used to determine the sensitivity of a particular type of income change if there is a change in the factors that influence it. J. Conclusion 1. Based on the test the elasticity of local revenue (PAD) to the regional income Ngawi Regency proven that the average value of the elasticity of 3.43 percent. It is proved that if a change in local revenue (PAD) by 1 percent it will be followed by changes in regional income Ngawi Regency the amount of 3.43 percent. 2. Based on the elasticity test Gross Regional Domestic Product (GDP) to the regional income Ngawi Regency proven that the average value of the elasticity of 2.86 percent. It is proved that if a change in GDP by 1 percent, it will be followed by changes in regional income Ngawi Regency the amount of 2.86 percent. h. Suggestion 1. Given the empirical elasticity of revenue to the regional income is proven, then the Local Government Ngawi Regency

17 MEDIA SOERJO Vol. 14 No. 1. April must do everything possible to increase local revenue (PAD) Ngawi given until the end of 2013 is still relatively small when compared to routine expenditure and development expenditure is approximately 84 billion dollars. The effort can be done by finding breakthroughs that accurate, so it is not only focused on the receipts of local taxes and levies as a source, but it should be more developed than other sectors that will give other revenue legitimate. If local revenue (PAD) can be improved optimally, then the local revenue Ngawi Regency will also be able to rise to the maximum. 2. Given the empirical elasticity of GDP to the regional income has been proven, it is only logical if the Local Government Ngawi Regency give serious attention to the rate of growth of GDP that the government Ngawi Regency so will be able to control and increase regional income Ngawi Regency. References Adriani dan Handayani, 2008, Pengaruh PDRB dan Jumlah Penduduk Terhadap Pendapatan Asli Daerah Kabupaten Merangin, Jurnal Ilmiah Universitas Batanghari Jambi, Vol. 8 No. 2 Juli Afandi, Zaenal, 2006, Analisis Unsur-unsur PAD Terhadap Pendapatan Daerah di Kabupaten Kediri, Tesis, Universitas Muhammadiyah Malang. Andi, 2008, Analisis Kontribusi PAD Terhadap Total Penerimaan Daerah Kabupaten Kudus, Tesis, Universitas Diponegoro, Semarang. Angleni, Rita, 2007, Pentingnya Penyusunan Rencana Penerimaan PAD Jangka Menengah Dalam Menunjang Akuntansi Manajemen Pada Dinas Pendapatan Daerah kota Padang, Bunga Rampai Manajemen Keuangan Daerah, Edisi Pertama, Yogyakarta, UPP AMP YKPN. Ardiasyah, Indra Widhi Analisis Kontribusi Pajak Hotel Dan Restoran Terhadap Pendapatan Asli Daerah Kabupaten Purworejo Tahun Tesis, Universitas Islam Indonesia, Yogyakarta. Arikunto, Suharsimi, 2007, Prosedur Penelitian: Suatu Pendekatan Praktek, Jakarta, Rineka Cipta. Bappeda Kabupaten Ngawi, 2011, Produk Domestik Regional Bruto (PDRB) Kabupaten Ngawi , 2012, Produk Domestik Regional Bruto (PDRB) Kabupaten Ngawi Brotodiharjo, R. Santoso, 2003, Pengantar Ilmu Hukum

18 MEDIA SOERJO Vol. 14 No. 1. April Pajak, Edisi empat, Bandung, PT.Refika Aditama Budiharjo,Ari, 2003, Pengaruh Jumlah Penduduk,Produk Domestik Bruto dan Inflasi Terhadap Penerimaan Pajak Bumi dan Bangunan Pada Kabupaten dan Kota di Propinsi Jawa Tengah, Tesis, Universitas Diponegoro. BPS Ngawi, 2011, Ngawi Dalam Angka Tahun , 2013, Ngawi Dalam Angka Tahun Cooper, Donald R., & Emory William, 1997, Metode Penelitian Bisnis (terjemahan), Jakarta, Erlangga. Datu, Indra Rindu, 2010, Analisis Faktor Yang Mempengaruhi Pendapatan Daerah di Makasar, Tesis, Universitas Hasanuddin Makasar. Davey, Kenneth, 2001, Pembiayaan Pemerintah Daerah, Jakarta, UI-Press. Devas, Nick et.all., 1997, Keuangan Pemerintahan Daerah di Indonesia, Jakarta, Universitas Indonesia. Elita, Penerimaan Penerimaan Pendapatan Asli Daerah, Jakarta, Rajawali. Gujarati, Damodar, 2004, Ekonometrika Dasar, Jakarta, Erlangga. Halim, Abdul, 2004, Anggaran Daerah dan Fiscal Stress Sebuah Studi Kasus pada Anggaran Daerah Provinsi di Indonesia JEBI, Vol. 16, No. 4. Kajatmiko, 2006, Konsep, Hambatan, dan Prospek di Era Otonomi Daerah, Jakarta, Penerbit Kompas. Mahi, Raksaka, 2005, Peran Pendapatan Asli Daerah di Era Otonomi, Jurnal Ekonomi dan Pembangunan Indonesia, Vol. VI No. 1, Juli. Mardiasmo Perpajakan, Yogyakarta, Andi ofset. Peraturan Menteri Dalam Negeri Nomor 13 Tahun 2006 Tentang Sumber Pendapatan Asli Daerah. Riduansyah, Mohammad, 2003, Kontribusi Pajak Daerah dan Retribusi Daerah Terhadap Pendapatan Asli Daerah dan Anggaran Pendapatan Belanja Daerah (Studi Kasus di Kota Bogor), Makara, Sosial Humaniora, Vol. 7 No. 2. Rosdiana, H., dan R. Tarigan Perpajakan: Teori dan Aplikasi. PT. Raja Grafindo Persada, Jakarta. Saberan.H, 2002, Produk Domestik Regional Bruto, Jakarta, Rajawali. Santoso, Purbayu B dan Rahayu, R, 2005, Analisis Pendapatan Asli Daerah dan Faktorfaktor yang Mempengaruhinya Dalam Upaya Pelaksanaan Otoda di Kabupaten Kediri, Dinamika Pembangunan, Vol 2 No. 1.

19 MEDIA SOERJO Vol. 14 No. 1. April Sapi udin, 2010, Upaya Peningkatan Pendapatan Asli Daerah Melalui Retribusi Daerah pada Dinas Pendapatan kabupaten Probolinggo, Malang, Tesis Universitas Brawijaya. Setda Kabupaten Ngawi, 2012, Laporan Keterangan Pertanggungjawaban Bupati Ngawi Tahun Anggaran Siahaan, 2005, Pajak Dan Retribusi Daerah, Jakarta, PT. Raja Grafindo Persada. Soemitro, Rochmat, 2001, Asas dan Dasar Perpajakan I, Bandung, PT. Eresco. Suandy, Erly, 2002, Hukum Pajak, Jakarta, Salemba Empat. Sukirno, 2003, Pertumbuhan Ekonomi, Jakarta, Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia. Sumaryadi, Nyoman, I, 2005, Perencanaan Pembagunan Daerah Otonomi dan Pemberdayaan Masyarakat, Jakarta, CV Cita Utama. Suparmoko, 2001, Keuangan Negara Dalam Teori Dan Praktek, Yogyakarta, BPFE. Tjahjono, Achmad dan Muhammad F. Husain, 2007, Perpajakan, Yogyakarta, Akademika Manajemen Perusahaan YKPN. Todaro M.P.,2000, Pembangunan Ekonomi di Dunia Ketiga, Jakarta, Penerbit Erlangga. Undang-undang Nomor 33 Tahun 2004 Tentang Perimbangan Keuangan Antara Pemerintah Pusat Dan Pemerintahan Daerah. Undang-undang Nomor 28 Tahun 2009 Tentang Pajak Daerah dan Retribusi Daerah. Weeks.J.R,2002. Population, California, Wadsworth Publishing Company. Wijaya, HAW, 2002, Otonomi Daerah Dan Daerah Otonom, Jakarta, Raja Grafindo Persada. Yani, Ahmad, 2002, Hubungan Keuangan Antara Pemerintah Pusat Dan Daerah Di Indonesia, Jakarta, Raja Grafindo Persada.