Daegu District Declares Fiscal Emergency, Halts $42 Million in New Projects

The Dalseo-gu district in Daegu has declared a fiscal emergency, announcing the suspension of new projects worth 59.4 billion won ($42 million) as it grapples with depleted financial reserves. This drastic measure comes as the district undergoes a high-intensity fiscal restructuring, re-evaluating all projects except those essential for vulnerable groups and public safety.

Dalseo-gu's financial self-sufficiency has declined for three consecutive years, dropping from 21.09% in 2023 to 17.28% this year. The district's surplus funds, which represent reserves available for local governments to use independently after closing accounts, have shrunk from the 50 billion won range to just 10 billion won. Furthermore, its integrated financial stabilization fund has only 300 million won remaining.

The district had previously issued 6 billion won in local bonds for the construction of the Songhyeon 2-dong Administrative Welfare Center and the Dalseo-gu Veterans Affairs Center. It also owes 9.5 billion won from the 11.5 billion won transferred from the parking special account and disaster management fund to the general account.

Social welfare spending constitutes a significant portion of Dalseo-gu's budget, accounting for 73.29% or 867.8 billion won this year, the third-highest proportion among all local government districts nationwide. Additionally, 12.9 billion won in district funds are allocated to urban regeneration projects in Sangin 2-dong, Duryu 3-dong, and Singdang-dong, with the district also responsible for post-completion operational and personnel costs.

Large-scale new projects to be halted include the Dalseo Wetland Eco-Observatory (33 billion won), Dalseo Starlight Astronomical Science Museum (19.9 billion won), and Dalseo Ecological Museum (6.5 billion won). Ongoing urban regeneration projects will have their timelines adjusted and their financial efficiency reassessed. Consumption-oriented festivals and singing contests will be merged or abolished, with 56 projects showing low performance or overlap, such as the Dalseo Taste Festival and various workshops, being considered for sunset clauses. New public tender projects will undergo fiscal impact assessments evaluating district burden, post-project operating costs, and economic ripple effects.

District Mayor Kim Yong-pan stated, "I will not mortgage tomorrow's Dalseo for today's popularity." He emphasized reducing wasteful spending while protecting essential welfare and public safety budgets. The district plans to request the central government to increase the legal rate of local transfer grants and directly allocate general grants to autonomous districts, as well as adjust the proportion of district burden for national and city-funded welfare projects.

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I will not mortgage tomorrow's Dalseo for today's popularity. We will reduce wasteful spending while protecting essential welfare and public safety budgets to the end.