Jeju Province faces criticism over supplementary budget including returned national funds

Jeju Province's proposed 8.47 trillion won supplementary budget has ignited controversy, with lawmakers criticizing the inclusion of 57.1 billion won in national funds that must be returned to the central government. The provincial administration submitted the supplementary budget proposal, an increase of 461.5 billion won from the existing 8.13 trillion won budget, just ten days after the new governor took office, citing the need to respond to the economic crisis.

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Jeju's status and credibility have fallen.

During the review by the Agriculture, Fisheries, and Livestock Committee, the return of hundreds of billions of won in national subsidies became a focal point. While the provincial government stated the increase was for public welfare and support for vulnerable groups, a significant portion, 12.4%, was earmarked for return to the government. This means only about 400 billion won is available for actual local economic recovery efforts. The situation is partly attributed to the province's past mismanagement of public welfare projects, exemplified by the failure to execute 8.9 billion won of the budget for the 'Citrus Facility Modernization Project' funded by the Free Trade Agreement (FTA) 기금 between 2020 and 2024. Consequently, the central government reduced the FTA fund allocation for the current year and demanded the return of previous funds.

The Culture, Tourism, and Sports Committee focused on the Jeju Tourism Fund. The province plans to allocate 20 billion won from this fund, along with 20 billion won from the Disaster Safety Fund and 10 billion won from the Rural Development Fund, to finance the supplementary budget. Although provincial ordinances allow for the use of surplus funds from these reserves as general budget funds, committee members argued that diverting them for other purposes lacks justification.

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Members of the committee pointed out that using funds for purposes other than their intended use is not justifiable.

The underlying reason for Jeju's reliance on various reserve funds for the supplementary budget is a severe financial strain. The province's debt stood at 2.53 trillion won as of last year, with projections indicating it could increase to 2.85 trillion won by the end of the current year. A provincial official explained that with declining tax revenues, such as property acquisition taxes, the province had no choice but to temporarily borrow funds from the Integrated Financial Stabilization Fund. Issuing new local bonds is also being suppressed due to the high existing debt ratio.

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We had no choice but to temporarily borrow funds from the Integrated Financial Stabilization Fund.