Abstract: With the scale of land finance expanding, research about causes and effects of land finance increasing. Among them, there are two famous views of land finance and competition to attract investment. Based on the empirical analysis of the municipal level, the paper founds that fiscal decentralization and performance competition work together to format the land finance, and it has no incentive to reduce investment in the budget. The expenditure structure of more investment, less public service has not been corrected, how to establish full-cover budget and optimize fiscal expenditure structure faces a serious challenge.