Chungnam faces potential 1 trillion won budget shortfall, debt concerns loom

The transition committee for the incoming Chungnam Province governor has raised alarms about a potential budget shortfall of over 1 trillion won for the current year, citing a combination of reduced revenue and increased expenditures.

Lee Jae-gwan, chairman of the 'Communicating Chungnam Preparation Committee,' stated that the projected deficit could seriously threaten the stability and sustainability of the provincial administration. The committee's analysis, based on reports from the Chungnam Provincial Budget Office, estimates a revenue shortfall of at least 468.7 billion won for 2026. A significant portion of this shortfall is linked to the unsuccessful sale of the Chungnam Forest Resources Research Institute land located in Sejong, for which four public tenders have failed to attract buyers this year.

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The projected budget deficit for the current year could exceed 1 trillion won.

Adding to the fiscal pressure, the province anticipates an excess expenditure of 561.7 billion won. This includes 464.2 billion won in payments to cities, counties, and the education office, along with an additional 68.8 billion won in matching funds for newly confirmed national government-subsidized projects. The committee highlighted that the province's debt has surged to over 2 trillion won, nearly tripling from 739.5 billion won in 2020 to 2.16 trillion won last year, according to a report by the Nareu Sarim Research Institute.

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This is not just a matter of operational difficulty; it seriously threatens the overall stability and sustainability of the provincial government.

Provincial budget officials explained that the debt increase is partly due to large-scale projects initiated during the previous administration, such as the Arts Center, Chungnam Museum of Art, and the International Exhibition and Convention Center, which began implementation in the current administration. The impact of reduced local tax revenue during the COVID-19 pandemic and the launch of new expansionary projects like 'Live Together' (a convertible rental housing project) in the current administration also contributed to the fiscal expansion.

Lee Jae-gwan cautioned that simple measures like adjusting some investment projects, cutting non-essential expenses, or temporarily utilizing reserve funds from other accounts would be insufficient to resolve the crisis. He assured that despite the dire financial conditions, the committee would make every effort to ensure the stable fulfillment of the new governor's campaign promises.

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The debt has nearly tripled from 739.5 billion won in 2020 to 2.16 trillion won last year.