Public utilities in Beijing have made great progress thanks to huge financial investments. With economic growth and rising income of urban residents，the demand for public utilities in Beijing has been increasing rapidly. Meanwhile，the low price of public utilities has distorted the consumption behavior of urban residents to a certain extent and stimulated urban residents’extra demands for utilities. This has led to a year-on-year increase in financial subsidies，increasing fiscal burden of Beijing and causing a loss of economic efficiency. Therefore，it is necessary to improve the forms and methods of financial subsidy for public utilities in various aspects.