This study explores the disparities in older adults' self-rated health within the urban landscape of China. Drawing on the 1% national population survey of China in 2015, it highlights how variations in city development contribute to geographical health disparities among older residents. In the era of the decentralized fiscal system, a crucial mechanism identified is the role of cities' local fiscal revenue in connecting their socioeconomic development and the health status among older adults. Despite efforts by cities in lower socioeconomic positions to increase fiscal expenditure and address deficits through central transfer payments, they prove inadequate in effectively mitigating population health disparities. The prioritization of economic growth and neglect of public service provision responsibilities are fundamental causes within this fiscal framework. The findings underscore the urgent need for increased central transfer payments in public services to address the growing disparities in older adults' health.