Gyeonggi’s 30% Cap on Provincial Subsidies Draws Rebuke for Shifting Burden to Cities and Counties

Gyeonggi Province’s plan to cap its share of subsidies for cities and counties at 30% has triggered strong opposition from all 31 basic local governments and members of the provincial council.

The province notified deputy heads of the cities and counties on Sept. 3 that programs receiving more than 30% in provincial funding would be uniformly limited to a maximum of 30%. It also plans to reorganize national subsidy matching programs that do not require a local financial contribution. The province cited a fiscal crisis caused by a shortfall of several hundred billion won in major tax revenues, including acquisition tax.

“

Applying a 30% ceiling uniformly is a major problem because the financial situations of the cities and counties differ.

The Association of Mayors and County Heads, led by Anyang Mayor Choi Dae-ho, delivered a proposal on Sept. 7 calling for the plan to be reconsidered. The association said provincial support had previously covered 50% to 70% of project costs. If that share falls to 30%, municipalities must make up the difference, forcing financially weaker local governments to reduce or abandon projects.

Choi said applying the same 30% ceiling to every municipality was a major problem because their financial situations differ. He stressed that many of the programs serve socially vulnerable people and provide livelihoods and welfare support, and said the province should consult fully with the cities and counties first.

“

The province is passing the pain on to powerless cities and counties instead of seeking a mutually beneficial solution to the fiscal crisis it faces as a metropolitan local government.

The Gyeonggi Provincial Council’s People Power Party accused the province of passing its fiscal crisis onto weaker local governments instead of seeking a cooperative solution. It said the province’s second supplementary budget would cut 136.8 billion won from essential infrastructure projects, including road and river works, and redirect the money to general welfare or national matching programs.

The party also said its public complaint center had received 244 complaints related to the supplementary budget. The complaints allegedly include reduced urban regeneration programs after the province withheld funding and emergency requests after cuts to Gyeonggi-style emergency welfare interrupted medical and nursing support for hospitalized basic livelihood security recipients. People Power Party floor leader Bang Seong-hwan called for the province to stop tightening municipal finances and said the council would closely scrutinize the budget to protect livelihood programs.

“

Gyeonggi Province must immediately stop squeezing city and county finances and fulfill its role as an intermediary.